On Thursday, Baird increased its price target for Verisk Analytics (NASDAQ:VRSK) shares, a data analytics provider, from $260 to $268, while reiterating an Outperform rating. The firm's decision reflects a positive evaluation of the company's performance and its potential for sustained growth.
The analyst from Baird highlighted Verisk's encouraging start to 2024, noting that market conditions and specific company drivers are expected to maintain robust growth.
Subscription revenue showed a healthy increase of 7.8% on an organic constant currency (occ) basis, providing a strong signal of the company's value. Additionally, the adjusted EBITDA margin was solid, bolstering confidence in Verisk's prospects for the year.
Verisk's multi-year outlook was also deemed attractive, owing to the company's strong position within the industry. Factors such as the lagged contractual benefits from property and casualty (P&C) industry premium growth, the potential for selling into improving end-market profitability, and cycles of product and platform development contribute to the favorable perspective.
Other self-help factors, including technological initiatives and go-to-market strategies, were also recognized as positive influences on the company's trajectory.
Baird expressed a liking for the risk/reward profile of Verisk Analytics, describing it as a defensive and low-risk compounder. The firm emphasized the good visibility into the company's fundamentals, which are expected to remain strong, supporting the raised price target and optimistic rating.
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