Verra Mobility (VRRM) AI Stock Analysis

• Market Cap: $2.53B
• Dividend Yield: N/A
• Average Volume (3M): 1.66M
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.37
• Revenue Growth: 8.52%
• EPS Growth: -45.92%
• Country: US
• Employees: 1,754
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.30
• Shares Outstanding: 151,361,950
• 10 Day Avg. Volume: 1,950,916
• 30 Day Avg. Volume: 1,659,870
• PEG Ratio: 0.07
• Price to Book (P/B): 12.16
• Price to Sales (P/S): 3.64
• P/FCF Ratio: 26.06
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 2.70
• Enterprise Value/Gross Profit: 2.78
• Enterprise Value/Ebitda: 7.02
• 1Y Price Target: $23.50
• Price Target Upside: 40.63% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.36
• Revenue Forecast (FY): $1.03B

• Rating: 64 Neutral
• Price Target: $17.50 ▲(4.73% Upside)
• Action: Downgraded Date: 02/26/26
• Date: Action: Downgraded 02/26/26

The score is primarily supported by strong underlying financial performance (growth, high margins, and improved balance-sheet flexibility). It is held back by weak technicals (price below major moving averages, negative MACD) and earnings-call signals of near-term margin pressure in 2026, partly offset by continued growth guidance and large contract momentum.

Positive Factors

Consistent revenue growth & high gross margins

Multi-year top-line growth and extremely high gross margins indicate durable product pricing power and low direct cost intensity. That combination supports recurring profitability, scalable SG&A leverage and sustained cash generation that can fund reinvestment and shareholder returns over the medium term.

Material deleveraging and stronger balance sheet

Sharp reduction in leverage meaningfully improves financial flexibility and lowers refinancing risk. A stronger credit profile supports investment in rollouts, M&A or continued buybacks while reducing interest sensitivity, making the company more resilient across economic cycles.

Large multi-year NYC contract and expanding addressable market

A near-$1B, multi-year government contract and incremental ARR bookings materially extend recurring revenue and scale in Government Solutions. Legislative-driven market expansion increases long-term TAM, anchoring multi-year revenue visibility and improving asset utilization across enforcement deployments.

Negative Factors

2026 margin headwinds from NYC pricing & MWBE costs

Structural contract terms and MWBE subcontract requirements impose recurring cost burdens and immediate margin compression. Until offset by efficiency programs, these mandated costs reduce medium-term EBITDA margins and free cash flow, constraining reinvestment or capital return plans.

Free cash flow conversion volatility

Although operating cash flow rose, declining year-over-year free cash flow and weaker conversion highlight sensitivity to working capital and timing. This variability can limit durable cash available for buybacks, debt paydown or capex, increasing execution risk for strategic investments.

Execution and rollout timing risks on large deployments

Complex, multi-year installations and external factors (weather, permitting) can bunch revenue and elevate implementation costs. That structural operational risk can delay expected cash flows and margin realization, making recovery lumpy and complicating medium-term planning.

Verra Mobility Business Overview & Revenue Model

Company Description

Verra Mobility Corporation provides smart mobility technology solutions and services in the United States, Australia, Canada, and Europe. It operates through three segments: Commercial Services; Government Solutions; and Parking Solutions. The Government Solutions segment offers automated safety solutions, including services and technologies that enable photo enforcement through road safety camera programs, which detects and process traffic violations related to red light, speed, school bus, and city bus lanes. This segment serves municipalities, counties, school districts, and law enforcement agencies. The Commercial Services segment provides automated toll and violations management, and title and registration services to rental car companies, fleet management companies, and other large fleet owners. The Parking Solutions segment provides an integrated suite of parking software and hardware solutions to universities, municipalities, parking operators, healthcare facilities, and transportation hubs. The company was incorporated in 2016 and is headquartered in Mesa, Arizona.

How the Company Makes Money

Verra Mobility generates revenue through various channels, primarily by offering tolling and violation management services, which involve processing tolls and fines for municipalities and private entities. The company earns fees from automated vehicle registration and toll collection services, providing a seamless experience for users. Additionally, Verra Mobility has a significant presence in the rental and fleet management sector, offering tracking and compliance solutions that generate recurring subscription revenues. Key partnerships with government agencies and transportation authorities play a crucial role in its earnings, as these collaborations enhance service offerings and expand the customer base. The company's revenue model is further supported by technology-driven solutions that optimize operational costs for clients, leading to long-term contracts and sustained revenue growth.

Verra Mobility Financial Statement Overview

Summary

Strong multi-year revenue growth and very high gross margins, with meaningful profitability improvement by 2025. Balance sheet improved sharply with major deleveraging, boosting flexibility. Offsets include volatility in net margins and weaker 2025 free-cash-flow conversion/YoY FCF decline.

Income Statement

Revenue has grown consistently over the period (from $394M in 2020 to $979M in 2025), showing a durable top-line trajectory. Profitability is strong with very high gross margins (~94%–98%) and solid EBITDA margins, and net income rebounded meaningfully from a small loss in 2020 to $137M in 2025. Offsetting this, net profit margin has been volatile (notably low in 2024 vs. 2025), and the 2025 EBIT margin appears inconsistent with EBIT dollars, which reduces confidence in that specific margin datapoint.

Balance Sheet

Leverage improved dramatically: total debt fell from ~ $1.07B in 2023–2024 to ~$38M in 2025, driving debt-to-equity down from elevated levels (over 4x in 2024) to a very conservative ~0.13x in 2025. Equity is moderate relative to assets, and returns on equity have been strong in 2025, signaling improved capital efficiency. The main weakness is historical balance-sheet risk—prior years carried high leverage, so the credit profile has improved materially but has not been low-risk for the full period.

Cash Flow

Operating cash flow is consistently positive and rising overall (from $47M in 2020 to $256M in 2025), and free cash flow is solid ($137M in 2025). Cash generation generally supports reported earnings, but conversion weakened in 2025 (free cash flow was ~53% of net income) and free cash flow declined year-over-year in 2025 (negative growth), indicating some pressure from working capital, timing, or reinvestment needs compared with prior years.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Mar 2022
Income Statement
Total Revenue	979.08M	879.21M	817.31M	741.60M	550.59M
Gross Profit	948.76M	860.22M	773.85M	694.34M	515.44M
EBITDA	375.92M	262.08M	287.52M	336.65M	229.64M
Net Income	136.63M	31.45M	57.02M	92.47M	41.45M
Balance Sheet
Total Assets	1.65B	1.61B	1.79B	1.76B	1.84B
Cash, Cash Equivalents and Short-Term Investments	65.27M	77.56M	138.63M	105.20M	101.28M
Total Debt	38.23M	1.07B	1.07B	1.25B	1.28B
Total Liabilities	1.35B	1.35B	1.37B	1.53B	1.58B
Stockholders Equity	292.96M	265.13M	421.47M	231.07M	259.96M
Cash Flow
Free Cash Flow	136.71M	152.79M	148.62M	170.15M	168.17M
Operating Cash Flow	255.80M	223.64M	206.10M	218.34M	193.17M
Investing Cash Flow	-118.79M	-69.72M	-58.29M	-48.59M	-475.97M
Financing Cash Flow	-150.97M	-211.43M	-117.79M	-164.93M	268.72M

Verra Mobility Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.71
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRRM, the sentiment is Negative. The current price of 16.71 is below the 20-day moving average (MA) of 18.29, below the 50-day MA of 20.58, and below the 200-day MA of 23.13, indicating a bearish trend. The MACD of -0.94 indicates Positive momentum. The RSI at 30.39 is Neutral, neither overbought nor oversold. The STOCH value of 29.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRRM.

Verra Mobility Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAY	71 Outperform	$3.08B	47.20	12.80%	―	44.34%	45.96%
INGM	70 Outperform	$4.86B	16.80	7.51%	1.39%	7.06%	-8.83%
VRRM	64 Neutral	$2.53B	19.75	48.96%	―	8.52%	-45.92%
SAIC	64 Neutral	$4.16B	11.77	23.75%	1.69%	-0.38%	31.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CNXC	49 Neutral	$2.01B	-1.58	-37.82%	3.38%	3.40%	53.13%

Verra Mobility Corporate Events

Verra Mobility Posts Strong 2025 Results, Issues 2026 Outlook

Verra Mobility on February 24, 2026 reported full-year 2025 revenue of $979.1 million, up 11% year over year, and net income of $136.6 million, with improved adjusted EPS and operating cash flow but a lower adjusted EBITDA margin amid higher implementation and New York City readiness costs. Fourth-quarter revenue rose 16% to $257.9 million, boosted mainly by a major New York City Department of Transportation red-light expansion program and broader enforcement and tolling activity, even as margins in Government and Parking Solutions compressed.

The company highlighted a new five-year contract with the New York City Department of Transportation, expanded bus lane and school bus stop arm enforcement programs, and continued growth in European operations, while Parking Solutions saw modest revenue gains but weaker profitability. Verra Mobility also repurchased $133.4 million of stock in the fourth quarter, ended 2025 with $65.3 million in cash, net debt of $971.8 million and net leverage of 2.3x, and issued fiscal 2026 guidance alongside supplemental investor materials posted to its website, underscoring a strategy to strengthen its core businesses and pursue long-term growth despite rising capital expenditures and project-related costs.

The most recent analyst rating on (VRRM) stock is a Hold with a $24.00 price target. To see the full list of analyst forecasts on Verra Mobility stock, see the VRRM Stock Forecast page.