Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Verisk Analytics, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.4% to 5.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 54, DPO 45, DIO 60). At a 8.3% WACC with mid-year discounting, the terminal value (84% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $235.52 per share, suggesting VRSK is undervalued by 26.9% at the current price of $185.63.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,535 | 1,639 | 1,748 | 1,847 | 1,952 | 2,001 |
| (−) Net Interest | 160 | 171 | 182 | 192 | 203 | 208 |
| (+) D&A | 248 | 254 | 262 | 284 | 310 | 318 |
| EBITDA | 1,944 | 2,063 | 2,192 | 2,323 | 2,466 | 2,528 |
| (−) Tax | 339 | 362 | 386 | 408 | 432 | — |
| (−) CapEx | 296 | 316 | 337 | 357 | 377 | — |
| (−) ΔWC | 120 | 35 | 37 | 34 | 35 | — |
| Free Cash Flow (FCF) | 1,187 | 1,350 | 1,431 | 1,525 | 1,622 | — |
| Peers' EBITDA Multiple | 17.6x | |||||
| Terminal Value | 44,359 | |||||
| WACC / Discount Rate | 8.27% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,141 | 1,198 | 1,174 | 1,155 | 1,134 | 29,813 |
| Enterprise Value | 35,615 | |||||
| Projection Period | 5,802 | 16.3% | ||||
| Terminal Value | 29,813 | 83.7% | ||||
| (−) Current Net Debt | 2,859 | |||||
| Equity Value | 32,756 | |||||
| (÷) Outstanding Shares | 139M | |||||
| Fair Price | $235 | +26.8% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.6x | 15.6x | 17.6x | 19.6x | 21.6x |
|---|---|---|---|---|---|
| 6.3% | $205 | $232 | $258 | $285 | $312 |
| 7.3% | $196 | $221 | $247 | $272 | $298 |
| 8.3% | $187 | $211 | $236 | $260 | $284 |
| 9.3% | $178 | $202 | $225 | $248 | $272 |
| 10.3% | $170 | $193 | $215 | $237 | $260 |
Current price: $185.63. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.