Is Verra Mobility Corporation (VRRM) Stock an Incredible Bargain?

For the period that ended November 15, 2019, the short interest in Verra Mobility Corporation (NASDAQ:VRRM) stock is on the up. The 9.1% rise could be an indication that investors and traders expect a drop in the share price, often as a result of a drop in the business’ fundamentals. The average brokerage opinion at 1.4 suggests disposing off these shares. Between October 31 and November 15, the total count of shorted shares totalled 17.73 million. That number was 1,479,154 more shares compared with the total of 16.25 million shares in the space of prior two weeks, which suggests more traders or funds are betting that the company stock will move down. The average daily volume for VRRM at the November 15th settlement surged to 1,983,358, versus 1,348,050 at the October 31st report. That led days to cover to move at 8.937951, a 25.84% decrease compared to the 12.052968 days to cover recorded at the prior short interest data release.

On December 03, 2019, Verra Mobility Corporation (NASDAQ:VRRM) shares gained 0.88% or 0.13 points to close at $14.91 with a heavy trading volume of 3.179 million shares. It opened the trading session at $14.67, the shares rose to $14.95 and dropped to $14.59, the range by which the price of stock traded the whole day. The company now has a market cap of $2.38 billion and currently has 159.47 million outstanding shares. Verra Mobility Corporation (VRRM) stock has plunged -0.6 percent of market value in 21 trading days.

VRRM stock’s trailing 3-year beta is 0, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was -$0.14 share in the trailing 52 weeks. The stock’s value surged 52.77 percent year to date (YTD) compared to a rise of 49.1 percent in 52 week’s period. The firm’s shares are still trading -2.9 percent below its 1-year high of $15.35 and 65.67 percent up from 52-week low of $9.00. The average consensus ranking on the company is 1.4, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a buy.

Verra Mobility Corporation (VRRM) is most likely going to rise 15.69 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $18.5-month high price target. This represents a whopping 24.08 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $17.5, which means a return possibility of 17.37 percent in comparison with the closing price of the stock of $14.91 on December 03. The lowest price set for the stock is $16 — just above 7.31 percent from VRRM share price now.

Past records have indicated that shares in Verra Mobility Corporation rose on 3 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of VRRM’s Q4 earnings on March 23. Analysts are predicting revenue to climb 14.3 percent to $109M in the financial fourth quarter, while EPS will soar by about -118.52 percent to $0.05 per share. In the last quarter, it earnings came worse than the $0.08184, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $128.24M, topping the $120.11M analysts had expected. Earnings are seen to rise by 128.4 percent this year, 74.23 percent in the coming year.

Let’s take a glimpse at some insider activity at Verra Mobility Corporation (NASDAQ:VRRM) and observe the pattern. The earliest insider trade happened on 11/18/2019. PLATINUM EQUITY LLC parted with a total of 17.25 million shares of the firm at average share price of $14.1. The total amount for the sale was set at $243.23 million. On completing this exchange, the Director, 10% Owner account balance was 25.28 million shares. The stock grew 5.74 percent from that insider sale. On 11/18/2019, PLATINUM EQUITY LLC, Director, 10% Owner, did a sale of 17.25 million shares at a price of $14.1 per share. This got rid of 243.23 million shares from the insider’s fortune and the stock experienced a 5.74 percent rally in price since the news became public. This exchange saw 25.28 million shares get out from the Director, 10% Owner account.

On 07/08/2019, Director, 10% Owner PLATINUM EQUITY LLC recorded a sale transaction valued at $27.29 million. The sale at $12.13 a share has eliminated 2.25 million shares from the insider’s portfolio position. Meanwhile, shares price witnessed 22.92 percent increase since the transaction reporting date. The company insider is left with 42.53 million shares remaining in the account. PLATINUM EQUITY LLC, who works as Director, 10% Owner at the company, performed a sale of 2.25 million shares in a transaction worth $27.29 million. The disposal recorded on 07/08/2019 was priced at $12.13 per share. The stock price soared 22.92 percent since the transaction. PLATINUM EQUITY LLC currently holds a stake of 42.53 million in VRRM stock which is worth $634.12 million after the insider selling.

The stock is lingering around the initial support level of $14.68. After this, the following support is at the zone of $14.46. Up until the time the VRRM stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 56.53 on the daily chart, and this may be a cause for concern. In case the price goes below $14.46 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $15.04 level may cause a pull-back move approaching $15.18 mark.

The industry VRRM deals with has an average P/E of 215.8. Its P/B ratio is standing at 7.2X compared to the 3.8 industry average. It is additionally sporting a 3.6 on the Price-to-Sales ratio, compared to the industry’s P/S average of 1.7. Verra Mobility Corporation has a 96.6% gross profit margin, with its operating margin around 9.1%. Alongside this, the company’s net profit margin currently stands at -4.6%.