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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Verra Mobility Corporation (XNAS:VRRM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VRRM
Name:
VERRA MOBILITY CORPORATION (XNAS:VRRM)
Sector:
19.77M
Industry:
Security & Protection Services
CEO:
Mr. David Roberts
Total Employees:
1,306
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 1614.37% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VERRA MOBILITY CORPORATION(VRRM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SECURITY & PROTECTION SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
15.7
One Month Price Target:
$15.81
Six Month Price Target :
$16.34
Likely Price in One Year's Time:
Ticker:
$16.99
Likely Trading Range Today Under (Normal Volatility)
$15.63
Price Upper limit ($) :
$15.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$14.69
This week:
$13.44
This month :
$11.18
Other Primary facts
Market Cap:
2.40B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
153.18M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.19%
-22.37%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$20.39
$18.24
$11.01
$13.16
Medium risk (<10%) entry points
Buy Call
Sell Call
$17.53
Buy Put:
Sell Put:
$17.07
$13.86
$14.33
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VRRM
Sharpe Ratio:
1.81%
Comparison:
VRRM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 3.28% higher than the industry
& is -20.78% lower than the market/S&P 500 average
Average Returns/Yield of
VRRM
Daily returns:
0.07%
Weekly returns:
0.33%
Monthly returns:
1.32%
Yearly returns:
15.65%
Comparison of returns:
Average annual returns/yield (last 3 years) is 1.33% above industry average
Classification:
VRRM, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.81
Statistical test of Returns:
VRRM has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.17%
Weekly Volatility:
7.09%
Monthly Volatility:
14.17%
Yearly Volatility:
49.09%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.83%
Volatility in last five trading days has been -73.87% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.44%
Weekly VaR:
-14.40%
Monthly VaR:
-28.81%
How Much Can the price of
VRRM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-25%
Worst case (decline):
>85%
This translates to price declining to:
$11.82
This translates to price declining to:
$2.36
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VRRM is a 103.32% riskier investment compared to the market/S&P 500 & is 74.19% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.93% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VRRM
Beta in relation to market/S&P 500--1.22
Expected beta in 1 year's time:
0.838
Expected beta in 3 year's time:
1.185
Unlevered (debt free) Beta:
0.32
Beta in relation to Nasdaq (XNAS):
0.976
Beta in relation to all global stocks::
1.094
Beta Comparison & Analysis
Beta of competitors/peers::
1.504
Beta is -18.85% lower than peers
Average Industry Beta:
1.346
Beta is -9.28% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
6.90%
Sustainable growth rate is -39.48% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.043
Alpha is 32.41% above industry average alpha yield
Alpha is 276% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VRRM
Equity cost of capital:
0.115
Equity cost of capital is -6.92% below industry mean WACC
Unlevered (without debt) cost of capital:
3.02%
Before-tax cost of debt:
3.99%
After-tax cost of debt:
3.15%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.15%
WACC is -28.07% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$4.12
Revenue growth rate per share of (3Y):
8.72
-
EPS:
$0.37
Expected Annual growth rate of EPS (3Y):
-17.02%
Expected future EPS growth rate is 48.31% higher than the Security & Protection Services industry
Free cash flow (FCF) per share:
$0.82
-
-
Debt per share
$8.11
EBITDA per share
$1.77
Valuation Analysis Today of
VRRM
P/E Ratio:
29.57
P/E Ratio of Competitors/Peers:
21.09
P/E ratio is 40.22% higher than main peers & is -76.33% lower than the industry
Stock price/value with industry average P/E ratio: $46.21
VRRM is -66.02% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
3.81
Price to sales ratio is -68.62% below the industry mean
P/B (Price to book value ratio):
8.72
Price to free cash flow: 19.26
Price to free cash flow ratio is -10.43% lower than the industry
Net income growth rate (3Y):
-
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
450.35%
Net debt to equity ratio:
420.83%
Debt to assets ratio:
68.08%
Net debt to assets ratio:
63.62%
Debt-to-asset ratio is 22.19% above industry average
Ability to repay debt:
Interest coverage ratio:
5.41
Interest coverage ratio is -88.58% less than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.642
Statistical significance of correlation:
VRRM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.527
Stock price is 21.89% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.527
Correlation of price movement with Nasdaq (^IXIC):
0.034
Covariance of price movement with the market:
0.062
Kurtosis
9.047
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.591
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
VRRM
Gross Profit Margin Ratio:
376%
Operating Profit Margin Ratio:
22.52%
Operating profit margin is 3.08% higher than the industry
Net Profit Margin Ratio:
376%
Effective Tax Rate:
37.44%
Effective tax rate is 74.56% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
21.90%
Return on equity (ROE) is 243.14% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.31%
Return on assets (ROA) is -13.78% lower than the industry
Financial Leverage:
3.1x
Current Ratio:
2.35
Current ratio is -58.16% below industry average
Cash Conversion Cycle (days):
-564
Cash conversion cycle is -281.97% below industry average
The remaining useful life of property plant & equipment is: 8.0 years
Stock based compensation to net income ratio:
7.36%
In-depth Efficiency Analysis
Revenue generated per employee:
483.2K
Each employee generates 74% more revenue than industry average revenue per employee
EBITDA generated per employee:
207.4K
Each employee generates 160% more EBITDA than industry average revenue per employee
Profit generated per employee:
46.3K
Each employee generates 234% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
15.1K
Each employee generates 146% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.1M
Each employee generates 146% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VRRM
SUN COUNTRY AIRLINES HOLDINGS, INC. (XNAS:SNCY)
PATRICK INDUSTRIES, INC. (XNAS:PATK)
ARCBEST CORPORATION (XNAS:ARCB)
HELIOS TECHNOLOGIES, INC. (XNYS:HLIO)
STAR BULK CARRIERS CORP. (XNAS:SBLK)
SKYWEST, INC. (XNAS:SKYW)
HUB GROUP, INC. (XNAS:HUBG)
HYDROFARM HOLDINGS GROUP, INC. (XNAS:HYFM)
HWCPL
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
631.12M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
38.02M
593.10M
-
26.48M
136.85M
-
161.44M
298.29M
-
50.06M
124.21M
270.83M
142.12M
60.40M
96.56M
36.16M
60.40M
Statement of Cash Flow
Date:
Period:
35.68M
Differed Income Tax :
- 18771.00K
Stock Based Compensation :
4.45M
Change in Working Capital :
31.25M
Accounts Receivables:
- 14300.00K
Other Working Capital:
-
Other Non-Cash Items:
- 31390.00K
Net Cash Provided by Operating Activities:
31.25M
Investments in PP&E:
- 11478.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
93.38M
-
93.38M
171.91M
15.45M
82.25M
362.98M
139.30M
837.91M
460.08M
-
-
24.22M
1.46B
-
1.82B
63.05M
11.95M
-
27.37M
51.78M
154.15M
1.24B
124.11M
1.39B
-
1.55B
36.59M
- 71376.00K
- 2386.0K
312.99M
March 31, 2022 at 6:00:00 AM
489.00M
275.82M
1.82B
-
1.25B
1.2B
-
-
- 11478.00K
- 2309.00K
-
-
-
- 26343.00K
- 28652.00K
2.23M
- 7039.00K
97.39M
-
31.25M
- 11478.00K
19.77M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
VRRM
2023
2024
2025
2026
2027
$14.51
$15.70
$16.98
$18.38
$19.89