NEW YORK (TheStreet) -- Verisk Analytics (Nasdaq:VRSK) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally poor debt management and weak operating cash flow.
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- Compared to other companies in the Professional Services industry and the overall market, VERISK ANALYTICS INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth came in higher than the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 14.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Professional Services industry average. The net income increased by 11.8% when compared to the same quarter one year prior, going from $65.58 million to $73.33 million.
- The debt-to-equity ratio is very high at 26.91 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. To add to this, VRSK has a quick ratio of 0.50, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly decreased to -$2.18 million or 105.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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