Editor's Note: 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. NEW YORK ( TheStreet) -- Verisk Analytics (Nasdaq: VRSK) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth, expanding profit margins, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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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 greatly exceeded the industry average of 18.6%. 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.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 39.63% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, VRSK should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- VERISK ANALYTICS INC has improved earnings per share by 13.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, VERISK ANALYTICS INC increased its bottom line by earning $1.63 versus $1.31 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $1.63).
- The gross profit margin for VERISK ANALYTICS INC is rather high; currently it is at 60.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 19.60% significantly outperformed against the industry average.
-- Written by a member of TheStreet Ratings Staff