Verra Mobility Corporation (VRRM): A Bull Case Theory 

We came across a bullish thesis on Verra Mobility Corporation on Valueinvestorsclub.com by zbeex. In this article, we will summarize the bulls’ thesis on VRRM. Verra Mobility Corporation’s share was trading at $21.84 as of November 26th. VRRM’s trailing and forward P/E were 64.24 and 15.50 respectively according to Yahoo Finance.

Verra Mobility Corporation provides smart mobility technology solutions in the United States, Australia, Europe, and Canada. VRRM is a specialty payments company operating through two core segments: Commercial Services (CS) and Government Solutions (GS). CS is the leading provider of toll management services for rental car and fleet management companies in North America, integrated with all major RACs and 54 tolling authorities. GS dominates automated traffic enforcement (ATE) in North America, including red-light, speed, and school bus stop-arm cameras, offering backend processing and billing.

The company benefits from strong competitive positions, with 90%+ market share in CS and 70% in GS, both segments demonstrating resilience and secular growth drivers. CS is experiencing high-single-digit growth supported by expanding cashless tolling and increased toll-road prevalence, while GS growth is accelerating due to legislation and the impending expansion of New York City’s ATE program. The company’s largest customer, NYC, represents $139 million in annual service revenue, and the recently finalized five-year contract, valued at $963 million, includes expansion to 600 intersections and 300 new bus-lane cameras, representing a 25% increase in recurring service revenue versus 2024.

This expansion, coupled with strong GS bookings outside NYC, points to FY26 and FY27 GS revenue significantly above consensus estimates. CS revenue is also trending above guidance, supported by stronger-than-expected TSA throughput and travel demand. Verra’s consolidated business is highly cash-generative, with projected 2028 free cash flow of $266 million, and the stock is currently trading at a ~5% forward FCF yield, undervalued given 8-10% sustainable earnings growth and optionality from new government contracts. Near-term catalysts include the official NYC contract announcement and potential analyst upgrades. Overall, Verra represents a compelling investment with multiple levers for upside, driven by both the underappreciated NYC contract and ongoing growth in CS and GS.

Previously we covered a bullish thesis on Samsara Inc. (IOT) by Compounding Your Wealth in April 2025, which highlighted strong ARR growth, AI-driven operational improvements, and expanding asset tracking solutions. The company’s stock price has depreciated approximately by 2.55% since our coverage. The thesis still stands as IOT’s growth trajectory remains robust. Verra Mobility (VRRM) shares a similar but emphasizes its underappreciated NYC contract and dominance in toll management and automated traffic enforcement.

Verra Mobility Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held VRRM at the end of the second quarter which was 26 in the previous quarter. While we acknowledge the risk and potential of VRRM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VRRM and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.