VERRA MOBILITY CORP (VRRM) Stock Fundamental Analysis
NASDAQ:VRRM - Nasdaq - US92511U1025 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to VRRM. VRRM was compared to 82 industry peers in the IT Services industry. While VRRM has a great profitability rating, there are some minor concerns on its financial health. VRRM is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
VRRM had positive earnings in the past year.
In the past year VRRM had a positive cash flow from operations.
VRRM had positive earnings in 4 of the past 5 years.
Each year in the past 5 years VRRM had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 1.95%, VRRM perfoms like the industry average, outperforming 53.66% of the companies in the same industry.
Looking at the Return On Equity, with a value of 11.86%, VRRM is in the better half of the industry, outperforming 67.07% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.02%, VRRM is in the better half of the industry, outperforming 78.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VRRM is significantly below the industry average of 22.24%.
The last Return On Invested Capital (13.02%) for VRRM is above the 3 year average (10.27%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.95% | ||
| ROE | 11.86% | ||
| ROIC | 13.02% |
ROA(3y)3.47%
ROA(5y)2.46%
ROE(3y)21.81%
ROE(5y)15.98%
ROIC(3y)10.27%
ROIC(5y)7.68%
1.3 Margins
The Profit Margin of VRRM (3.58%) is comparable to the rest of the industry.
VRRM's Profit Margin has been stable in the last couple of years.
The Operating Margin of VRRM (26.51%) is better than 97.56% of its industry peers.
In the last couple of years the Operating Margin of VRRM has grown nicely.
VRRM has a Gross Margin of 94.76%. This is amongst the best in the industry. VRRM outperforms 100.00% of its industry peers.
VRRM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.51% | ||
| PM (TTM) | 3.58% | ||
| GM | 94.76% |
OM growth 3Y9.3%
OM growth 5Y3.04%
PM growth 3Y-21.94%
PM growth 5Y-1.26%
GM growth 3Y0.41%
GM growth 5Y-0.19%
2. Health
2.1 Basic Checks
VRRM has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for VRRM has been reduced compared to 1 year ago.
Compared to 5 years ago, VRRM has more shares outstanding
The debt/assets ratio for VRRM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.51 indicates that VRRM is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.51, VRRM perfoms like the industry average, outperforming 48.78% of the companies in the same industry.
The Debt to FCF ratio of VRRM is 6.77, which is on the high side as it means it would take VRRM, 6.77 years of fcf income to pay off all of its debts.
VRRM's Debt to FCF ratio of 6.77 is in line compared to the rest of the industry. VRRM outperforms 46.34% of its industry peers.
A Debt/Equity ratio of 3.90 is on the high side and indicates that VRRM has dependencies on debt financing.
VRRM has a worse Debt to Equity ratio (3.90) than 82.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.9 | ||
| Debt/FCF | 6.77 | ||
| Altman-Z | 2.51 |
ROIC/WACC1.42
WACC9.19%
2.3 Liquidity
A Current Ratio of 1.97 indicates that VRRM should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.97, VRRM is in the better half of the industry, outperforming 64.63% of the companies in the same industry.
VRRM has a Quick Ratio of 1.89. This is a normal value and indicates that VRRM is financially healthy and should not expect problems in meeting its short term obligations.
VRRM has a better Quick ratio (1.89) than 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.89 |
3. Growth
3.1 Past
VRRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.89%, which is quite good.
VRRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 42.41% yearly.
VRRM shows a small growth in Revenue. In the last year, the Revenue has grown by 7.57%.
VRRM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 14.40% yearly.
EPS 1Y (TTM)13.89%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%37.5%
Revenue 1Y (TTM)7.57%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%4.97%
3.2 Future
VRRM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.27% yearly.
VRRM is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.19% yearly.
EPS Next Y9.34%
EPS Next 2Y11.53%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue Next Year6%
Revenue Next 2Y6.88%
Revenue Next 3Y7.19%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 18.06, VRRM is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of VRRM indicates a somewhat cheap valuation: VRRM is cheaper than 69.51% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of VRRM to the average of the S&P500 Index (23.99), we can say VRRM is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.51 indicates a correct valuation of VRRM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VRRM indicates a somewhat cheap valuation: VRRM is cheaper than 70.73% of the companies listed in the same industry.
VRRM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.06 | ||
| Fwd PE | 16.51 |
4.2 Price Multiples
65.85% of the companies in the same industry are more expensive than VRRM, based on the Enterprise Value to EBITDA ratio.
VRRM's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. VRRM is cheaper than 63.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.17 | ||
| EV/EBITDA | 13.18 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VRRM does not grow enough to justify the current Price/Earnings ratio.
VRRM has a very decent profitability rating, which may justify a higher PE ratio.
VRRM's earnings are expected to grow with 12.27% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.93
PEG (5Y)0.43
EPS Next 2Y11.53%
EPS Next 3Y12.27%
5. Dividend
5.1 Amount
No dividends for VRRM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
22.21
-0.04 (-0.18%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners100.53%
Inst Owner Change-2.76%
Ins Owners0.75%
Ins Owner Change1.45%
Market Cap3.54B
Analysts84.62
Price Target29.67 (33.59%)
Short Float %2%
Short Ratio2.17
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.13%
Min EPS beat(2)-0.63%
Max EPS beat(2)8.88%
EPS beat(4)3
Avg EPS beat(4)2.67%
Min EPS beat(4)-0.63%
Max EPS beat(4)8.88%
EPS beat(8)6
Avg EPS beat(8)3.29%
EPS beat(12)8
Avg EPS beat(12)3.92%
EPS beat(16)10
Avg EPS beat(16)-5.64%
Revenue beat(2)0
Avg Revenue beat(2)-1.97%
Min Revenue beat(2)-2.43%
Max Revenue beat(2)-1.5%
Revenue beat(4)1
Avg Revenue beat(4)-0.93%
Min Revenue beat(4)-2.43%
Max Revenue beat(4)1.28%
Revenue beat(8)4
Avg Revenue beat(8)0.12%
Revenue beat(12)6
Avg Revenue beat(12)0.14%
Revenue beat(16)9
Avg Revenue beat(16)1.11%
PT rev (1m)-1.13%
PT rev (3m)-0.29%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.99%
EPS NY rev (1m)0%
EPS NY rev (3m)1.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.02%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-0.13%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.06 | ||
| Fwd PE | 16.51 | ||
| P/S | 4.03 | ||
| P/FCF | 23.17 | ||
| P/OCF | 15.83 | ||
| P/B | 13.35 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.18 |
EPS(TTM)1.23
EY5.54%
EPS(NY)1.34
Fwd EY6.06%
FCF(TTM)0.96
FCFY4.32%
OCF(TTM)1.4
OCFY6.32%
SpS5.52
BVpS1.66
TBVpS-4.41
PEG (NY)1.93
PEG (5Y)0.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.95% | ||
| ROE | 11.86% | ||
| ROCE | 16.48% | ||
| ROIC | 13.02% | ||
| ROICexc | 13.77% | ||
| ROICexgc | 49.87% | ||
| OM | 26.51% | ||
| PM (TTM) | 3.58% | ||
| GM | 94.76% | ||
| FCFM | 17.38% |
ROA(3y)3.47%
ROA(5y)2.46%
ROE(3y)21.81%
ROE(5y)15.98%
ROIC(3y)10.27%
ROIC(5y)7.68%
ROICexc(3y)11.02%
ROICexc(5y)8.25%
ROICexgc(3y)50.23%
ROICexgc(5y)40.02%
ROCE(3y)12.99%
ROCE(5y)9.72%
ROICexcg growth 3Y9.79%
ROICexcg growth 5Y-1.24%
ROICexc growth 3Y34.5%
ROICexc growth 5Y14.79%
OM growth 3Y9.3%
OM growth 5Y3.04%
PM growth 3Y-21.94%
PM growth 5Y-1.26%
GM growth 3Y0.41%
GM growth 5Y-0.19%
F-Score6
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.9 | ||
| Debt/FCF | 6.77 | ||
| Debt/EBITDA | 3.03 | ||
| Cap/Depr | 65.29% | ||
| Cap/Sales | 8.06% | ||
| Interest Coverage | 3.06 | ||
| Cash Conversion | 65.46% | ||
| Profit Quality | 485.84% | ||
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.89 | ||
| Altman-Z | 2.51 |
F-Score6
WACC9.19%
ROIC/WACC1.42
Cap/Depr(3y)50.29%
Cap/Depr(5y)38.63%
Cap/Sales(3y)7.2%
Cap/Sales(5y)6.46%
Profit Quality(3y)310.13%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)13.89%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%37.5%
EPS Next Y9.34%
EPS Next 2Y11.53%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue 1Y (TTM)7.57%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%4.97%
Revenue Next Year6%
Revenue Next 2Y6.88%
Revenue Next 3Y7.19%
Revenue Next 5YN/A
EBIT growth 1Y23.44%
EBIT growth 3Y27.75%
EBIT growth 5Y17.88%
EBIT Next Year31.18%
EBIT Next 3Y15.39%
EBIT Next 5YN/A
FCF growth 1Y2.81%
FCF growth 3Y-3.15%
FCF growth 5Y7.98%
OCF growth 1Y8.51%
OCF growth 3Y5%
OCF growth 5Y10.82%