Value
9.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.0 |
| P/S | 10.0 |
| EV/EBITDA | 9.5 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 2.8x
- ▸PEG: 0.14
- ▸Attractively valued
VRRM · Why this verdict
Why Verra Mobility (VRRM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score6.2/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Verra Mobility trades at $4.98 with a forward P/E of 4.8x and PEG ratio of 0.19, placing it in the attractively valued tier on nearly every metric, while a confirmed death cross, capitulation-level RSI near 18, and 136% implied volatility reflect a stock in acute technical distress that must stabilize before the value thesis can be realized.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades at a forward P/E of 4.8x and a PEG ratio of 0.19 — among the most attractively valued readings in the technology sector — while delivering a 46% return on equity and a strong Piotroski F-Score of 8/9, indicating the discount is not explained by deteriorating fundamentals. Valuation breakdown | If the value thesis holds, the forward P/E should expand toward 8x within 12 months as investors recognize the quality-valuation mismatch, implying a price target closer to $8.45 per analyst consensus. | Tripped→Stable |
| CounterSub-$5 stocks with a market cap of $760 million below the $1 billion investable threshold trade at deep discounts precisely because institutional ownership is restricted, and the discount may persist structurally rather than closing. | ||
The company generates a 46% return on equity with a Piotroski F-Score of 8 out of 9, ranking it highly on quality among peers, and analysts rate it in the 8th percentile for ROE versus sector peers, suggesting durable business quality despite small market cap. Quality breakdown | Return on equity should remain above 30% over the next 12 months, confirming that the high ROE is structural rather than a one-time event from leverage or asset sales. | ↓Deteriorating |
| CounterFree cash flow is only 41% of net income — a red flag indicating earnings quality problems — which means the 46% ROE may be overstated relative to actual cash generation. | ||
The RSI has fallen to 18, which is below the 20-level that historically marks capitulation territory, with the 200-day moving average declining at -10.9% over 30 days — levels that in prior cycles have preceded mean-reversion rallies. Momentum breakdown | RSI should recover above 40 within 6 months as selling pressure exhausts, and the stock should rise above $6, more than 20% above the current $4.98. | Tripped→Stable |
| CounterCapitulation signals fail when the underlying fundamental trend is deteriorating; the -38.7% downward revision to earnings estimates over 30 days suggests analysts are cutting numbers, not stabilizing. | ||
The company has beaten earnings estimates in 3 of the last 4 quarters, with positive surprise percentages of 5%, 7.7%, and 3.25%, demonstrating consistent if modest execution above consensus expectations. Earnings | Earnings per share should meet or exceed consensus estimates in at least 3 of the next 4 quarters, and EPS should remain above $0.20 per quarter to support the current low multiple. | ↑Improving |
| CounterThe most recent quarter missed by -4.08% and earnings estimate revisions are down -38.7% over 30 days, suggesting the beat streak may be under pressure from rising analyst skepticism. | ||
The stock trades at a forward P/E of 4.8x and a PEG ratio of 0.19 — among the most attractively valued readings in the technology sector — while delivering a 46% return on equity and a strong Piotroski F-Score of 8/9, indicating the discount is not explained by deteriorating fundamentals.
Tripped→StableValuation breakdown
- Expectation
- If the value thesis holds, the forward P/E should expand toward 8x within 12 months as investors recognize the quality-valuation mismatch, implying a price target closer to $8.45 per analyst consensus.
CounterSub-$5 stocks with a market cap of $760 million below the $1 billion investable threshold trade at deep discounts precisely because institutional ownership is restricted, and the discount may persist structurally rather than closing.
The company generates a 46% return on equity with a Piotroski F-Score of 8 out of 9, ranking it highly on quality among peers, and analysts rate it in the 8th percentile for ROE versus sector peers, suggesting durable business quality despite small market cap.
↓DeterioratingQuality breakdown
- Expectation
- Return on equity should remain above 30% over the next 12 months, confirming that the high ROE is structural rather than a one-time event from leverage or asset sales.
CounterFree cash flow is only 41% of net income — a red flag indicating earnings quality problems — which means the 46% ROE may be overstated relative to actual cash generation.
The RSI has fallen to 18, which is below the 20-level that historically marks capitulation territory, with the 200-day moving average declining at -10.9% over 30 days — levels that in prior cycles have preceded mean-reversion rallies.
Tripped→StableMomentum breakdown
- Expectation
- RSI should recover above 40 within 6 months as selling pressure exhausts, and the stock should rise above $6, more than 20% above the current $4.98.
CounterCapitulation signals fail when the underlying fundamental trend is deteriorating; the -38.7% downward revision to earnings estimates over 30 days suggests analysts are cutting numbers, not stabilizing.
The company has beaten earnings estimates in 3 of the last 4 quarters, with positive surprise percentages of 5%, 7.7%, and 3.25%, demonstrating consistent if modest execution above consensus expectations.
↑ImprovingEarnings
- Expectation
- Earnings per share should meet or exceed consensus estimates in at least 3 of the next 4 quarters, and EPS should remain above $0.20 per quarter to support the current low multiple.
CounterThe most recent quarter missed by -4.08% and earnings estimate revisions are down -38.7% over 30 days, suggesting the beat streak may be under pressure from rising analyst skepticism.
Per-dimension breakdown
Quality
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.8 |
| ROA | 5.6 |
| Gross margin | 6.9 |
| Op margin | 10.0 |
| Net margin | 1.9 |
| Current ratio | 7.2 |
| FCF quality | 10.0 |
| Moat | 4.6 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 319% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
6.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
| EPS growth | 10.0 |
- ▸Declining revenue: -1%
Momentum
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 3.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -23.7%/30d — confirmed downtrend
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.0 |
| Analyst rating | 5.0 |
| Price target | 10.0 |
- ▸LLM news sentiment: -0.40 (n=4)
- ▸Analyst upside: 95%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.7 |
| quality rank | 4.2 |
| growth rank | 1.6 |
- ▸Attractive P/E vs peers
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.6 |
| support resistance | 8.3 |
| 52w position | 0.0 |
| gap | 7.0 |
Risk (lower is worse)
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 9.9 |
| volatility | 0.0 |
| put call | 0.0 |
| implied vol | 0.0 |
| max pain risk | 5.0 |
| beta | 10.0 |
| debt equity | 0.9 |
| news risk | 3.0 |
- ▸Elevated put/call: 2.00
- ▸High IV: 85%
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 9.2 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- ASYMMETRY:4.7>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:112d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.2<4.5
- CEO_TRANSITION
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
4.67
Upside
+70.1%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 41
EdgeInst Constrain — Small cap ($0.4B) below institutional reach
SuitabilitySpeculative — Drawdown -90% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 3.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 9.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.2<4.5, CEO_TRANSITION, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 4.67 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 9.6, Insider at 7.3, and Catalyst at 6.8; the weakest are Momentum at 3.2, Peer rank at 3.7, and Risk (lower is worse) at 4.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 4.67 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value MultiplesTripped
Trip ifForward P/E contracts further to below 3.5x without a corresponding improvement in earnings estimates, indicating the market is applying a deeper discount rather than converging to fair value.
- P2Return On Equity Quality
Trip ifReturn on equity falls below 20% for 2 consecutive quarters, more than 50% below the current 46% level.
- P3Death Cross Capitulation SignalTripped
Trip ifStock price falls below $3.50, more than 30% below the current $4.98, indicating the capitulation level has not held.
- P4Earnings Beat History
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.