维里斯克（VRSK）：2025年第一季度跟进——展现韧性

USA | Information ServicesVerisk 1Q25 Follow-up—Resiliency on Display We are incrementally more positive on VRSK following solid 1Q results.Investors should arguably have more confidence in the remainder of 2025as Subscription revenues continue to show strong organic growth on betterprice realization, and Transaction revenues have lapped elevated activity. Ourupdated estimates reflect a bit more internal investment but are otherwiseunchanged. Only a historically high valuation keeps us at Hold. Resiliency on display.It is tough to ignore the inherent stability in VRSK's business model, as1Q revenue growth of +7.9% occ was near the high end of the company's historical +6-8% y/yrange, and full year guidance was reiterated despite the more uncertain backdrop. The companycontinues to roll out new products, with several launched this quarter, and more to launch laterthis year as insurers continue down their digital transformation journey. This has provided VRSKa means to realize price increases that are currently above the more typical +3-4% seen annuallyin most year, and when combined with continued high single digit growth in industry net writtenpremiums, should allow the company to maintain organic growth at or near the high end of itshistorical range. Looking ahead, mgmt also noted that its current investment levels are sufficientto roll out new products and enhancements at a pace the industry can absorb. Put another way,industry leading adj EBITDA margins of 55.4% this quarter remain biased higher on operatingleverage due to limited need to materially increase investment spend. With so many positives, theonly thing keeping us at Hold is valuation, with the current P/E ratio, which sits at 43.6x our 2025 adjEPS estimate of $6.91, at an all-time high. Our sense is that some of the multiple's current strengthis being driven by a relative flight to safety given the resiliency of VRSK's business in up and downmarkets. For now, we prefer to be patient, waiting for a more attractive entry point. Reiterate Hold. Related Research 1Q25FirstTake:SolidQtrasResultsModestly Beat, and Guidance Reiterated(5/7/2025) Things we like: •Strong HSD organic growth in both Underwriting (+7.2% y/y) and Claims (+9.6% y/y)•Better price realization than historical as mgmt focused on more value based pricing•Simplitium acquisition likely reinforces strong moat within Extreme Events Info Services—1Q25 Preview +Assessing Downside Risk in a Recession(4/17/2025) Things to think about: Downgrade to Hold—Revenue TailwindsModerating and Valuation Appears Full(10/16/23) •Transactional revenues face significantly easier y/y comps moving forward, but the oppositeis true for subscription revenues, which face increasingly tougher comps.•Recovery in Marketing Solns spend at insurance clients offset by softness at non-insurance•Direct premium growth was +10.4% in 2023, up from +9.7% in 2022 (2024 10K) Tweaking estimates, Price target to $294 from $280.Our 2025 revenue estimate is unchangedat $3,070M, though our adj EPS estimate decreases $0.09 to $6.91 on higher internal investment. Surinder Thind, CFA * | Equity Analyst(415) 229-1515 | sthind@jefferies.com Logan Schuh * | Equity Associate+1 (201) 685-6981 | lschuh@jefferies.com Colton Feldmann, CPA * | Equity Associate(312) 588-5523 | cfeldmann@jefferies.com The Long View: Verisk Investment Thesis / Where We Differ •Organic growth rarely deviates from 6-8% range.•Valuation multiple is near peak levels.•Cautious on Florida and California Insurance markets.•Mgmt continues deploying divestiture proceeds in $2.5B accelerated sharerepurchase plan. Upside Scenario,$340, +13% Base Case,$294, -2% Downside Scenario,$200, -34% Calendar 2025 Outlook Calendar 2025 Outlook Calendar 2025 Outlook •Decelerating economic growth•Organic growth in 6-8% range•Adj EBITDA margins expand an additional 25-75bps in 2025•Expect more tuck-in M&A.•Price target: $294 (= 2025E Adj EPS $6.91, P/Eratio 42.5x) •Fullreciprocaltariffsand/oreconomicrecession•Organic growth falls below 6-8% range•Margins fall below 54-56% target range•Execution risk on investment spend (returns donot materialize).•Further consolidation in P&C customer base.•Price target: $200 (= 2025E Adj EPS $6.65, P/Eratio 30x) •Little to no change in economic conditions•Organic growth accelerates above 6-8% range•Margins exceed 54-56% target range•Mgmt repurchases additional shares outsideASR plan•Price target: $340 (= 2025E Adj EPS $7.50, P/Eratio 45x) Sustainability Matters Catalysts Top Material Issue(s): 1) Critical Incident Risk Mgmt.Founded in 1971 as an insurance rating bureaufocusing on risk analytics, Verisk has grown into a leading data provider. As such, with data being thelifeblood of the firm, we think companies should routinely run scenarios for any low-probability but high-impact events.2) Business Ethics.As a data analytics firm specializing in Insurance and Energy, VRSKprovides leading institutions with data on how to