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 scores excellent on profitability, 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
In the past year VRRM was profitable.
In the past year VRRM had a positive cash flow from operations.
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 54.22% of its industry peers.
VRRM has a better Return On Equity (11.56%) than 69.88% of its industry peers.
VRRM has a Return On Invested Capital of 12.88%. This is amongst the best in the industry. VRRM outperforms 81.93% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VRRM is significantly below the industry average of 22.31%.
The 3 year average ROIC (10.27%) for VRRM is below the current ROIC(12.88%), indicating increased profibility in the last year.
| 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
VRRM's Profit Margin of 3.88% is fine compared to the rest of the industry. VRRM outperforms 60.24% of its industry peers.
In the last couple of years the Profit Margin of VRRM has remained more or less at the same level.
VRRM has a better Operating Margin (26.45%) than 97.59% of its industry peers.
VRRM's Operating Margin has improved in the last couple of years.
VRRM's Gross Margin of 94.48% is amongst the best of 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 | 26.45% | ||
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so VRRM is still creating some value.
VRRM has less shares outstanding than it did 1 year ago.
VRRM has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, VRRM has a worse debt to assets ratio.
2.2 Solvency
VRRM has an Altman-Z score of 2.72. This is not the best score and indicates that VRRM is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.72, VRRM perfoms like the industry average, outperforming 48.19% of the companies in the same industry.
VRRM has a debt to FCF ratio of 5.92. This is a neutral value as VRRM would need 5.92 years to pay back of all of its debts.
With a Debt to FCF ratio value of 5.92, VRRM perfoms like the industry average, outperforming 50.60% 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.
VRRM has a Debt to Equity ratio of 3.45. This is amonst the worse of the industry: VRRM underperforms 84.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.45 | ||
| Debt/FCF | 5.92 | ||
| Altman-Z | 2.72 |
ROIC/WACC1.35
WACC9.51%
2.3 Liquidity
VRRM has a Current Ratio of 2.19. This indicates that VRRM is financially healthy and has no problem in meeting its short term obligations.
VRRM has a Current ratio of 2.19. This is in the better half of the industry: VRRM outperforms 67.47% of its industry peers.
A Quick Ratio of 2.10 indicates that VRRM has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.10, VRRM is in the better half of the industry, outperforming 62.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.19 | ||
| Quick Ratio | 2.1 |
3. Growth
3.1 Past
VRRM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.22%, 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)16.22%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%9.68%
Revenue 1Y (TTM)7.57%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%6.11%
3.2 Future
Based on estimates for the next years, VRRM will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.27% on average per year.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 18.83 indicates a rather expensive valuation of VRRM.
Compared to the rest of the industry, the Price/Earnings ratio of VRRM indicates a somewhat cheap valuation: VRRM is cheaper than 63.86% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of VRRM to the average of the S&P500 Index (26.87), we can say VRRM is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 15.86, the valuation of VRRM can be described as correct.
Based on the Price/Forward Earnings ratio, VRRM is valued a bit cheaper than the industry average as 66.27% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of VRRM to the average of the S&P500 Index (35.34), we can say VRRM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.83 | ||
| Fwd PE | 15.86 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VRRM is valued a bit cheaper than 61.45% of the companies in the same industry.
60.24% of the companies in the same industry are more expensive than VRRM, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.2 | ||
| EV/EBITDA | 13.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
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)2.04
PEG (5Y)0.44
EPS Next 2Y11.58%
EPS Next 3Y12.27%
5. Dividend
5.1 Amount
VRRM does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
24.29
+0.17 (+0.7%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners104.48%
Inst Owner Change-1.72%
Ins Owners0.9%
Ins Owner Change1.71%
Market Cap3.87B
Analysts84.62
Price Target29.5 (21.45%)
Short Float %1.18%
Short Ratio2.04
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%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.83 | ||
| Fwd PE | 15.86 | ||
| P/S | 4.34 | ||
| P/FCF | 22.2 | ||
| P/OCF | 15.35 | ||
| P/B | 12.93 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.89 |
EPS(TTM)1.29
EY5.31%
EPS(NY)1.53
Fwd EY6.3%
FCF(TTM)1.09
FCFY4.5%
OCF(TTM)1.58
OCFY6.51%
SpS5.6
BVpS1.88
TBVpS-4.1
PEG (NY)2.04
PEG (5Y)0.44
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 | 2.72 |
F-Score5
WACC9.51%
ROIC/WACC1.35
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)16.22%
EPS 3Y27.03%
EPS 5Y42.41%
EPS Q2Q%9.68%
EPS Next Y9.23%
EPS Next 2Y11.58%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue 1Y (TTM)7.57%
Revenue growth 3Y16.88%
Revenue growth 5Y14.4%
Sales Q2Q%6.11%
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%