Valuing Verra Mobility (VRRM) After New Infrastructure Survey and Expansion Highlights

Verra Mobility (VRRM) has released new survey results showing that a majority of Americans favor new approaches to infrastructure funding, including an energy tax on electric vehicle owners. The company also highlighted broad public recognition that state infrastructure is overdue for improvement.

See our latest analysis for Verra Mobility.

Verra Mobility’s push to spotlight infrastructure investment hasn’t gone unnoticed, but despite these headlines, its recent momentum has cooled. A 1-year total shareholder return of -2.8% contrasts with a much stronger 42% total return over three years. Recent events and persistent discussions around new infrastructure funding haven’t yet translated into sustained share price gains, suggesting the market is still weighing the company’s long-term potential.

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With shares now trading at over a 33% discount to analyst targets despite recent gains in revenue and net income, investors may wonder if Verra Mobility is truly undervalued or if the market has already factored in future growth prospects.

Most Popular Narrative: 25% Undervalued

With Verra Mobility’s latest closing price at $22.36 and the most-followed narrative setting fair value at $29.83, there is a striking gap between current market sentiment and what is priced in by consensus. This difference highlights diverging expectations for the company in the years ahead.

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Read the complete narrative.

Want to know why analysts believe the market could be missing out? The foundation of this valuation is sky-high earnings growth, a margin surge, and a profit multiple more often seen in high-tech disruptors. Which bold assumptions underpin that price, and what big levers could move it even higher or lower? Break down the narrative to uncover what is fueling this optimistic projection.

Result: Fair Value of $29.83 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent macroeconomic challenges or unexpected customer churn could undermine projected growth and profitability. These factors pose real challenges to the bullish outlook for Verra Mobility.

Find out about the key risks to this Verra Mobility narrative.

Another View: Multiples Paint a Different Picture

Looking beyond the optimistic fair value estimate, the company is trading at a steep price-to-earnings ratio of 69.8x. That is significantly higher than the industry average of 23.2x and the peer group’s 17.9x, and more than double the fair ratio of 32.4x. This gap raises questions about whether current hopes for rapid earnings growth are already factored in. Could this leave investors vulnerable if those targets are missed?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Verra Mobility Narrative

If you see the story differently or want to dive deeper into the numbers, you can build your own narrative based on the latest data in just a few minutes. Do it your way.

A great starting point for your Verra Mobility research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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