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. VRRM has an excellent profitability rating, but there are some minor concerns on its financial health. VRRM has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
VRRM had positive earnings in the past year.
VRRM had a positive operating cash flow in the past year.
Of the past 5 years VRRM 4 years were profitable.
Each year in the past 5 years VRRM had a positive operating cash flow.
1.2 Ratios
VRRM has a Return On Assets of 2.11%. This is comparable to the rest of the industry: VRRM outperforms 53.66% of its industry peers.
VRRM has a Return On Equity of 11.56%. This is in the better half of the industry: VRRM outperforms 67.07% of its industry peers.
VRRM's Return On Invested Capital of 12.88% is amongst the best of the industry. VRRM outperforms 81.71% of its industry peers.
The Average Return On Invested Capital over the past 3 years for VRRM is significantly below the industry average of 21.60%.
The last Return On Invested Capital (12.88%) for VRRM is above the 3 year average (10.27%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.11% | ||
| ROE | 11.56% | ||
| ROIC | 12.88% |
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 (3.88%) is comparable to the rest of the industry.
VRRM's Profit Margin has been stable in the last couple of years.
VRRM has a better Operating Margin (26.45%) than 97.56% of its industry peers.
VRRM's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 94.48%, VRRM belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Gross Margin of VRRM has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.45% | ||
| PM (TTM) | 3.88% | ||
| GM | 94.48% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), VRRM is creating some value.
The number of shares outstanding for VRRM has been reduced compared to 1 year ago.
VRRM has more shares outstanding than it did 5 years ago.
The debt/assets ratio for VRRM is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.76 indicates that VRRM is not a great score, but indicates only limited risk for bankruptcy at the moment.
VRRM has a Altman-Z score (2.76) which is in line with its industry peers.
The Debt to FCF ratio of VRRM is 5.92, which is a neutral value as it means it would take VRRM, 5.92 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 5.92, VRRM perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
A Debt/Equity ratio of 3.45 is on the high side and indicates that VRRM has dependencies on debt financing.
With a Debt to Equity ratio value of 3.45, VRRM is not doing good in the industry: 84.15% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.45 | ||
| Debt/FCF | 5.92 | ||
| Altman-Z | 2.76 |
ROIC/WACC1.36
WACC9.48%
2.3 Liquidity
A Current Ratio of 2.19 indicates that VRRM has no problem at all paying its short term obligations.
VRRM has a better Current ratio (2.19) than 65.85% of its industry peers.
VRRM has a Quick Ratio of 2.10. This indicates that VRRM is financially healthy and has no problem in meeting its short term obligations.
VRRM has a Quick ratio of 2.10. This is in the better half of the industry: VRRM outperforms 65.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 2.1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.60% over the past year.
VRRM shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 42.41% yearly.
Looking at the last year, VRRM shows a small growth in Revenue. The Revenue has grown by 6.90% in the last year.
The Revenue has been growing by 14.40% on average over the past years. This is quite good.
EPS 1Y (TTM)15.6%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%11.11%
Revenue 1Y (TTM)6.9%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%6.45%
3.2 Future
The Earnings Per Share is expected to grow by 12.27% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.16% on average over the next years.
EPS Next Y9.23%
EPS Next 2Y11.58%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue Next Year5.8%
Revenue Next 2Y6.62%
Revenue Next 3Y7.16%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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
A Price/Earnings ratio of 19.56 indicates a rather expensive valuation of VRRM.
67.07% of the companies in the same industry are more expensive than VRRM, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.50. VRRM is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 16.09 indicates a correct valuation of VRRM.
Based on the Price/Forward Earnings ratio, VRRM is valued a bit cheaper than 69.51% of the companies in the same industry.
VRRM is valuated cheaply when we compare the Price/Forward Earnings ratio to 36.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.56 | ||
| Fwd PE | 16.09 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VRRM indicates a somewhat cheap valuation: VRRM is cheaper than 65.85% of the companies listed in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as VRRM.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.52 | ||
| EV/EBITDA | 14.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of VRRM 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)2.12
PEG (5Y)0.46
EPS Next 2Y11.58%
EPS Next 3Y12.27%
5. Dividend
5.1 Amount
No dividends for VRRM!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
24.64
-0.23 (-0.92%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners103.92%
Inst Owner Change-0.14%
Ins Owners0.9%
Ins Owner Change1.71%
Market Cap3.93B
Analysts84.62
Price Target29.5 (19.72%)
Short Float %1.31%
Short Ratio2.08
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)2
Avg EPS beat(2)5.66%
Min EPS beat(2)2.43%
Max EPS beat(2)8.88%
EPS beat(4)3
Avg EPS beat(4)3.24%
Min EPS beat(4)-0.63%
Max EPS beat(4)8.88%
EPS beat(8)6
Avg EPS beat(8)1.65%
EPS beat(12)9
Avg EPS beat(12)4.47%
EPS beat(16)11
Avg EPS beat(16)3.76%
Revenue beat(2)1
Avg Revenue beat(2)-0.31%
Min Revenue beat(2)-1.5%
Max Revenue beat(2)0.89%
Revenue beat(4)1
Avg Revenue beat(4)-1.03%
Min Revenue beat(4)-2.43%
Max Revenue beat(4)0.89%
Revenue beat(8)4
Avg Revenue beat(8)-0.13%
Revenue beat(12)6
Avg Revenue beat(12)0.1%
Revenue beat(16)10
Avg Revenue beat(16)1.4%
PT rev (1m)0%
PT rev (3m)-0.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.44%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.56 | ||
| Fwd PE | 16.09 | ||
| P/S | 4.4 | ||
| P/FCF | 22.52 | ||
| P/OCF | 15.57 | ||
| P/B | 13.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.16 |
EPS(TTM)1.26
EY5.11%
EPS(NY)1.53
Fwd EY6.22%
FCF(TTM)1.09
FCFY4.44%
OCF(TTM)1.58
OCFY6.42%
SpS5.6
BVpS1.88
TBVpS-4.1
PEG (NY)2.12
PEG (5Y)0.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.11% | ||
| ROE | 11.56% | ||
| ROCE | 16.3% | ||
| ROIC | 12.88% | ||
| ROICexc | 13.92% | ||
| ROICexgc | 48.3% | ||
| OM | 26.45% | ||
| PM (TTM) | 3.88% | ||
| GM | 94.48% | ||
| FCFM | 19.54% |
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-Score5
Asset Turnover0.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.45 | ||
| Debt/FCF | 5.92 | ||
| Debt/EBITDA | 2.99 | ||
| Cap/Depr | 71.31% | ||
| Cap/Sales | 8.72% | ||
| Interest Coverage | 3.25 | ||
| Cash Conversion | 73.07% | ||
| Profit Quality | 503.65% | ||
| Current Ratio | 2.19 | ||
| Quick Ratio | 2.1 | ||
| Altman-Z | 2.76 |
F-Score5
WACC9.48%
ROIC/WACC1.36
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)15.6%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%11.11%
EPS Next Y9.23%
EPS Next 2Y11.58%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue 1Y (TTM)6.9%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%6.45%
Revenue Next Year5.8%
Revenue Next 2Y6.62%
Revenue Next 3Y7.16%
Revenue Next 5YN/A
EBIT growth 1Y22.3%
EBIT growth 3Y27.75%
EBIT growth 5Y17.88%
EBIT Next Year30.2%
EBIT Next 3Y15.29%
EBIT Next 5YN/A
FCF growth 1Y-1.55%
FCF growth 3Y-3.15%
FCF growth 5Y7.98%
OCF growth 1Y8.6%
OCF growth 3Y5%
OCF growth 5Y10.82%