One-glance verdict
Undervalued
$14.11 our estimate vs market $2.80
Wall Street consensus: $6.40 (-54.6% lower than our fair-value estimate)
80% below our estimate, below the bear case
Fundamentals snapshot
Verra Mobility Corporation
VRRM · NCM · Technology · Information Technology Services
Current price
$2.80
52-week range
$2.60 - $23.50
Market cap
$425.63M
Balance sheet
Distressed
3.69x Stretched
Net debt $941.40M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 11.3% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Reward Trades at 11.7x P/E vs peer median 15.9x (26.7% cheaper).
- Risk Insider ownership is only 1.1% (peer median: 3.9%).
What this company does
Verra Mobility Corporation
Verra Mobility helps manage traffic and parking for governments and businesses, like making sure people pay tolls correctly or enforcing speed limits with cameras. The money mostly comes from fees and services related to this technology, which matters because it provides a steady stream of income (recurring revenue – meaning money that comes in regularly, like a subscription).
How the company got here
Verra Mobility's story began in 1987 with a focus on pioneering photo enforcement technology to improve road safety in the U.S.. Over the years, the company grew and evolved through strategic acquisitions and rebranding. A significant transformation occurred in 2018 when it became a public company and adopted the Verra Mobility name. More recently, in 2021, Verra Mobility acquired Redflex Holdings, strengthening its government solutions, and T2 Systems, which established its parking solutions segment. These moves have shaped Verra Mobility into a diversified smart mobility technology provider.
What it actually does
Verra Mobility provides technology solutions that make transportation safer, smarter, and easier to manage. They help various customers, from government agencies to rental car companies, handle complex vehicle-related transactions. This includes managing things like tolls, traffic violations, and parking. Essentially, Verra Mobility uses technology and data to streamline these processes, making them more efficient and less burdensome for their clients.
Commercial Services
This segment is Verra Mobility's largest source of revenue and focuses on managing toll and violation processes for businesses that operate large fleets of vehicles. This includes rental car companies, commercial fleet operators, and fleet management companies. They help these businesses handle toll payments and process any traffic violations that occur with their vehicles, as well as manage vehicle title and registration services. This service is crucial for companies that have many vehicles on the road and need an efficient way to manage these administrative tasks.
Government Solutions
Verra Mobility partners with government entities like municipalities, school districts, and law enforcement agencies to enhance road safety. They provide and manage automated enforcement systems, such as cameras that detect red-light running, speeding, and school bus stop-arm violations. These solutions help enforce traffic laws, improve driver behavior, and ultimately reduce accidents. The company offers end-to-end services, from installing the technology to processing violations and providing support.
Parking Solutions
This segment offers a comprehensive suite of software, hardware, and transaction processing solutions for managing parking facilities. Customers include universities, municipalities, and commercial parking operators. Verra Mobility provides systems for issuing parking permits, managing enforcement, and handling event parking. Their technology helps streamline parking operations, making it easier for both operators and users to manage parking spaces and payments.
What management is betting on now
Verra Mobility's current strategy focuses on strengthening its position within each of its core business segments. Management is prioritizing deepening relationships with existing customers and expanding services to commercial fleets. They are also focused on operational efficiency and profitability, aiming to create a more agile and customer-centric organization. The company is investing in technology and data intelligence to continue making transportation safer and easier for everyone.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
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
FY2026 Q3
$89.41M
Revenue
$28.31M
Net income
$40.39M
Diluted EPS
0.27
Operating cash flow
$114.53M
Free cash flow
$89.41M
Fetching…
Sources
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
Is it cheap or expensive?
Fair value $14.11 vs current price $2.80
Wall Street consensus is the average analyst price target: $6.40 (-54.6% lower than our fair-value estimate).
Our most-likely fair value is $14.11 a share — about 403.8% above today's price of $2.80, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $941.4M. Interest coverage 3.7x.
Net debt
$941.40M
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 $1.08B 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 $5.32B 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 11.3% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
-
Trades at 11.7x P/E vs peer median 15.9x (26.7% cheaper).
Risks
-
Insider ownership is only 1.1% (peer median: 3.9%).
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)
11.67x
Forward P/E
3.13x
P/B
1.61x
P/S
0.42x
EV/EBITDA
3.86x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
54.3%
Operating margin
25.3%
Net margin
3.8%
ROE
11.3%
ROA
8.7%
Health
Liquidity and balance-sheet strength
Debt / equity
4.07x
Current ratio
2.05x
Quick ratio
1.70x
Total debt
$1.08B
Total cash
$136.97M
Growth
How the business has been compounding
Revenue TTM
$114.12M
Revenue 5Y CAGR
35.0%
EPS TTM
0.24
EPS 5Y CAGR
19.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$251.75M
Free CF TTM
$136.71M
FCF margin
119.8%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
—