On Wednesday, Morgan Stanley made an adjustment to its price target for Verisk Analytics (NASDAQ:VRSK), increasing it to $243.00 from the previous $232.00. The firm has decided to maintain its Equalweight rating on the stock.
The decision comes after Verisk Analytics reported robust financial results, surpassing expectations in revenue and adjusted EBITDA by 1% and 3%, respectively. The company's adjusted earnings per share (EPS) also exceeded forecasts by 13 cents or 9%, although approximately half of this beat was attributed to tax benefits.
Verisk Analytics has confirmed its guidance for the year 2024, aligning with market anticipations. Noteworthy was the company's subscription revenue, which grew by 7.8%, despite a challenging comparison from a previous high of 8.7%. However, this growth was somewhat tempered by a 3.1% increase in transactional revenue, which is expected to face tougher comparisons in 2024.
Following this performance, Morgan Stanley has revised its adjusted EBITDA projections for Verisk Analytics slightly upwards by about 1% for the years 2024 and 2025. The valuation of the company is deemed fair by Morgan Stanley, citing a 30 times multiple of the expected 2025 levered free cash flow. The new price target reflects this assessment while the Equalweight rating indicates a neutral view on the stock's current valuation and future prospects.
InvestingPro Insights
Verisk Analytics (NASDAQ:VRSK) has shown a pattern of strong financial discipline and shareholder-friendly actions, as evidenced by the management's aggressive share buyback strategy. This, coupled with a high shareholder yield, emphasizes the company's commitment to returning value to its investors. The consistency in raising its dividend for 5 consecutive years also speaks to the reliability and confidence in its financial health.
InvestingPro Data highlights a robust market capitalization of $33.28B and an impressive gross profit margin of 67.31% for the last twelve months as of Q1 2023. Although the P/E ratio stands at a relatively high 43.26, reflecting a premium valuation, the company's gross profit of $1804.9M and operating income margin of 42.3% demonstrate its strong operational efficiency.
For investors seeking detailed analysis and additional insights, there are 13 more InvestingPro Tips available for Verisk Analytics at Investing.com/pro/VRSK. To enhance your investment strategy with these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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