Analyzing Verisk Analytics (NASDAQ:VRSK) and Applied Digital (NASDAQ:APLD)

Applied Digital (NASDAQ:APLD) and Verisk Analytics (NASDAQ:VRSK) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Profitability

This table compares Applied Digital and Verisk Analytics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Applied Digital	-88.95%	-109.89%	-30.00%
Verisk Analytics	32.03%	252.11%	20.18%

Valuation & Earnings

This table compares Applied Digital and Verisk Analytics’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Applied Digital	$165.58 million	2.68	-$44.65 million	($0.79)	-4.10
Verisk Analytics	$2.78 billion	14.09	$614.60 million	$5.36	51.14

Verisk Analytics has higher revenue and earnings than Applied Digital. Applied Digital is trading at a lower price-to-earnings ratio than Verisk Analytics, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Applied Digital and Verisk Analytics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Digital	0	0	5	0	3.00
Verisk Analytics	0	7	6	1	2.57

Applied Digital presently has a consensus target price of $8.20, suggesting a potential upside of 153.09%. Verisk Analytics has a consensus target price of $273.54, suggesting a potential downside of 0.20%. Given Applied Digital’s stronger consensus rating and higher possible upside, research analysts clearly believe Applied Digital is more favorable than Verisk Analytics.

Volatility and Risk

Applied Digital has a beta of 4.51, meaning that its share price is 351% more volatile than the S&P 500. Comparatively, Verisk Analytics has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.

Institutional and Insider Ownership

65.7% of Applied Digital shares are owned by institutional investors. Comparatively, 90.0% of Verisk Analytics shares are owned by institutional investors. 20.5% of Applied Digital shares are owned by company insiders. Comparatively, 0.4% of Verisk Analytics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Verisk Analytics beats Applied Digital on 11 of the 15 factors compared between the two stocks.

About Applied Digital

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services. The company was formerly known as Applied Blockchain, Inc. and changed its name to Applied Digital Corporation in November 2022. Applied Digital Corporation is based in Dallas, Texas.

About Verisk Analytics

Verisk Analytics, Inc. provides data analytics and technology solutions to the insurance markets in the United States and internationally. It offers policy language, prospective loss costs, policy writing and rating rules, and various underwriting solutions for risk selection and segmentation, pricing, and workflow optimization; property- and auto- specific rating and underwriting information solutions that allows clients to understand, quantify, underwrite, mitigate, and avoid potential loss for risks; catastrophe modeling solutions, which enables companies to identify, quantify, and plan for the financial consequences of catastrophes for use by insurers, reinsurers, intermediaries, financial institutions, and governments. The company also provides life insurance solutions for transforming current workflows in life insurance underwriting, claim insights, policy administration, unclaimed property/equity, compliance and fraud detection, and actuarial and portfolio modeling; Marketing Solutions, such as compliant, real-time decisioning, profitability, and risk assessment for inbound consumer interactions; and international underwriting and claims solutions. In addition, it offers claims insurance solutions, which provides analytics in fraud detection, compliance reporting, subrogation liability assessment, litigation, and repair cost estimation and valuation solutions; and casualty solutions, such as compliance, casualty claims decision support, and workflow automation solutions. Further, the company supplies software to the specialty insurance market. The company was founded in 1971 and is headquartered in Jersey City, New Jersey.