Verisk trades at $298.89 and has moved in lockstep with the market. Its shares have returned 7% over the last six months while the S&P 500 has gained 3.7%.
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Why Is Verisk Not Exciting?
We're cautious about Verisk. Here are two reasons why we avoid VRSK and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Verisk’s sales grew at a sluggish 1.9% compounded annual growth rate over the last five years. This fell short of our benchmarks. 
2. Recent EPS Growth Below Our Standards
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Verisk’s EPS grew at an unimpressive 8.7% compounded annual growth rate over the last two years. On the bright side, this performance was higher than its 5.4% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
Verisk isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 41.5× forward P/E (or $298.89 per share). This multiple tells us a lot of good news is priced in - you can find more timely opportunities elsewhere. We’d suggest looking at one of our all-time favorite software stocks.
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