Analyst David Koning of Robert W. Baird maintained a Hold rating on Verra Mobility (VRRM – Research Report), with a price target of $25.00.
Geoff Meacham has given his Hold rating due to a combination of factors influencing the valuation and growth prospects of Verra Mobility. Considering the recent agreement by Conduent to sell its Curbside Management and Public Safety Solutions businesses, he draws a comparison to Verra Mobility’s similar segments, noting that despite Verra Mobility’s larger size and faster growth rate, there is a distinct difference in valuation multiples and growth trajectories between the two companies.
Verra Mobility’s Government and Parking segments show positive year-to-date growth, in contrast to Conduent’s declining revenues in corresponding segments. However, the sale of Conduent’s businesses at a lower multiple than Verra Mobility’s valuation suggests a cautious market sentiment that could be factoring into the Hold rating. Verra Mobility’s Commercial business, which is not directly comparable to Conduent’s sold assets, contributes high margins and growth but may not fully mitigate the implications of the market comparison. Hence, the Hold rating reflects a balanced view of Verra Mobility’s growth prospects against market valuations and the performance of peer segments.
VRRM’s price has also changed moderately for the past six months – from $19.130 to $23.120, which is a 20.86% increase.
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Verra Mobility (VRRM) Company Description:
Verra Mobility Corp. engages in the provision of smart mobility technology solutions and services. It operates through the Government Solutions and Commercial Services segments. The Government Solutions segment delivers traffic law enforcement services and products to state and local governments. The Commercial Services segment offers tolling and violation management services to rental car companies, commercial fleet vehicle owners, and violation issuing authorities. The company was founded on August 15, 2016 and is headquartered in Mesa, AZ.
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