One-glance verdict
Undervalued
$15.24 our estimate vs market $3.54
Wall Street consensus: $7.00 (-54.1% lower than our fair-value estimate)
77% below our estimate, below the bear case
Fundamentals snapshot
Verra Mobility Corporation
VRRM · NCM · Technology · Information Technology Services
Current price
$3.54
52-week range
$3.40 - $25.45
Market cap
$538.02M
Balance sheet
Distressed
3.69x Stretched
Net debt $1.03B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 15.4% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Reward Trades at 13.1x P/E vs peer median 20.0x (34.3% cheaper).
- Risk Insider ownership is only 1.1% (peer median: 4.0%).
What this company does
Verra Mobility Corporation
Verra Mobility handles the behind-the-scenes technology for things like tolls and traffic tickets, making most of its money from rental car companies and commercial fleets. The company also provides and manages red-light and speed camera systems for governments, which generates recurring revenue (predictable income that comes in regularly, like a subscription). This matters because their services are integrated into everyday driving and parking, creating a stable and predictable business.
How the company got here
Verra Mobility's story is one of bringing different companies together over time. Its origins trace back to a company founded in 1987 called American Traffic Solutions, which was a pioneer in using cameras to enforce traffic laws. A major turning point came in 2018 when it became a publicly traded company and was renamed Verra Mobility, reflecting a wider focus on smart transportation technology beyond just traffic enforcement. To expand its services, the company made significant acquisitions, including Redflex Holdings in 2021 to grow its government safety solutions, and T2 Systems in the same year to enter the parking management business. These moves transformed Verra Mobility into a more diverse company operating at the intersection of vehicles, data, and infrastructure.
What it actually does
Think of Verra Mobility as a company that handles the complicated and repetitive tasks that come with managing vehicles on the road. For large fleets of cars, like those at rental car companies, it manages the process of paying tolls and dealing with traffic tickets. For cities and school districts, it provides and operates camera systems that enforce speed limits, red lights, and school bus safety, aiming to make roads safer. The company also offers a complete system for managing parking for places like universities and airports, from issuing permits to handling payments and enforcement. Essentially, Verra Mobility uses technology to make transportation safer and more efficient for its customers.
Commercial Services
This is Verra Mobility's largest business segment, and it primarily serves companies with large fleets of vehicles, like rental car agencies and businesses with many company cars. When you rent a car and drive through a toll, this part of Verra Mobility's business is what ensures the toll gets paid and billed correctly, saving the rental company a major headache. They also handle the processing of traffic violations, like speeding or parking tickets, for these fleets. The rental car companies and fleet owners pay Verra Mobility a fee for each of these transactions, which creates a steady stream of income for the company.
Government Solutions
This segment works with government bodies like cities, counties, and school districts to improve public safety on the roads. They install and manage automated camera systems to enforce traffic laws, such as red-light cameras at intersections and speed cameras in school zones. When a camera catches a violation, Verra Mobility's platform processes the information, which helps the local authorities issue a citation. Government agencies pay Verra Mobility for these end-to-end services, which helps them to change driver behavior and increase road safety without needing to build the technology themselves.
Parking Solutions
This part of the company, built around the acquisition of a business called T2 Systems, provides a complete package of software and hardware for managing parking facilities. Their customers are organizations that operate large parking areas, such as universities, municipalities, airports, and hospitals. Verra Mobility provides them with the tools to handle everything from issuing parking permits and processing payments to enforcing parking rules. This allows the parking operators to manage their lots and garages more efficiently and generate revenue.
What management is betting on now
Verra Mobility is focused on expanding its role in what it calls the "smart mobility ecosystem." This means they are looking for ways to use technology to solve more of the complex problems that arise as transportation becomes more connected and automated. A key part of their strategy involves expanding their services with existing government clients, such as the large, long-term contract with New York City for traffic enforcement. The company is also focused on integrating its different business lines to offer more comprehensive solutions to its customers and operate more efficiently. By investing in technology like artificial intelligence and forming strategic partnerships, they aim to stay at the forefront of making transportation safer and easier.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$85.11M
FY2024 Q4
$21.64M
FY2025 Q1
$41.72M
FY2025 Q2
$40.27M
FY2025 Q3
$48.97M
FY2025 Q4
$5.75M
FY2026 Q1
$9.64M
FY2026 Q2
$32.56M
Revenue
$25.83M
Net income
$-48.18M
Diluted EPS
-0.32
Operating cash flow
$56.41M
Free cash flow
$32.56M
Fetching…
Sources
Revenue
$27.32M
Net income
$26.74M
Diluted EPS
0.17
Operating cash flow
$40.84M
Free cash flow
$9.64M
Fetching…
Sources
Revenue
$32.66M
Net income
$18.88M
Diluted EPS
0.12
Operating cash flow
$39.97M
Free cash flow
$5.75M
Fetching…
Sources
Revenue
$35.70M
Net income
$46.84M
Diluted EPS
0.29
Operating cash flow
$77.72M
Free cash flow
$48.97M
Fetching…
Sources
Revenue
$33.16M
Net income
$38.58M
Diluted EPS
0.24
Operating cash flow
$75.15M
Free cash flow
$40.27M
Fetching…
Sources
Revenue
$31.45M
Net income
$32.34M
Diluted EPS
0.20
Operating cash flow
$62.97M
Free cash flow
$41.72M
Fetching…
Sources
Revenue
$32.45M
Net income
$-66.66M
Diluted EPS
-0.39
Operating cash flow
$40.49M
Free cash flow
$21.64M
Fetching…
Sources
Revenue
$28.36M
Net income
$34.73M
Diluted EPS
0.21
Operating cash flow
$108.79M
Free cash flow
$85.11M
Fetching…
Sources
Is it cheap or expensive?
Fair value $15.24 vs current price $3.54
Wall Street consensus is the average analyst price target: $7.00 (-54.1% lower than our fair-value estimate).
Our most-likely fair value is $15.24 a share — about 330.4% above today's price of $3.54, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $1.0B. Interest coverage 3.7x.
Net debt
$1.03B
Interest coverage
3.69x
Verra Mobility Corporation's profit covers its interest bill about 3.7 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
VRRM
BASELINE
Verra Mobility Corporation
Total debt $1.09B Interest coverage 3.69x This is the baseline the peer rows are being compared against.
Total debt $851.00M Interest coverage -1.21x -100% vs VRRM This peer has almost no interest-payment cushion compared with VRRM.
Total debt $5.36B Interest coverage 2.76x -25% vs VRRM Carries about 1.3x less debt cushion than VRRM.
Total debt $26.55M Interest coverage -11.33x -100% vs VRRM This peer has almost no interest-payment cushion compared with VRRM.
What you should know
The case for and against VRRM
3 Rewards
1 Risk
Rewards
-
Returns 15.4% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
-
Trades at 13.1x P/E vs peer median 20.0x (34.3% cheaper).
Risks
-
Insider ownership is only 1.1% (peer median: 4.0%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
13.11x
Forward P/E
3.73x
P/B
2.41x
P/S
0.53x
EV/EBITDA
4.38x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
55.7%
Operating margin
27.2%
Net margin
4.4%
ROE
15.4%
ROA
9.2%
Health
Liquidity and balance-sheet strength
Debt / equity
4.86x
Current ratio
2.06x
Quick ratio
1.77x
Total debt
$1.09B
Total cash
$57.13M
Growth
How the business has been compounding
Revenue TTM
$121.51M
Revenue 5Y CAGR
35.0%
EPS TTM
0.27
EPS 5Y CAGR
19.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$214.94M
Free CF TTM
$136.71M
FCF margin
112.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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