Verra Mobility Corporation Class A Common Stock (VRRM)

FairStock Score: 76/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $83 million in annual free cash flow (3.7% yield on market cap)
• High return on equity of 49.0% demonstrating efficient capital deployment
• Revenue growth of 16.4% demonstrates strong top-line momentum
• FairStock composite score of 76/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($6) with negative 148% margin of safety—limited downside protection
• High leverage at 3.64x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.2 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Verra Mobility Corporation Class A Common Stock is a small-cap technology company valued at $2.3 billion. The business generates $979 million in annual revenue with a 1.9% net margin and $83 million in free cash flow. From a quality standpoint, Verra shows distressed Altman Z-Score of 1.2 warrants caution and extraordinary 49% return on equity. On valuation, the stock is reasonably priced at 17.8x earnings, with trades far above its Graham Number ($6) with no margin of safety. Growth dynamics show revenue growing at 16.4% and profit growth of 128.3%. Our composite FairStock Score of 76/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Verra's 16% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $83 million in annual free cash flow (3.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 3.6x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer