VRSK – Market expectations are for stable Uniform ROA, but management may be concerned about cloud computing, Geomni, and their pipeline

• Verisk Analytics, Inc. (VRSK:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with a 33.8x Uniform P/E. At these levels, the market has expectations for Uniform ROA to remain stable, but management may have concerns about their transition to cloud computing, Geomni, and pipeline opportunities
• Specifically, management may be overstating the efficiency and customer-service-related benefits of transitioning to a cloud computing system, and they may be concerned about their core business leverage and new revolving debt agreements. Moreover, they may lack confidence in their investment in Geomni and its ability to improve roof report revenue and provide cost efficiencies. Management may also be exaggerating their pipeline opportunities, the potential of Sequel product suite and EDM launches, and their positioning among disruptive players in their verticals.