In a report released today, David Koning from Robert W. Baird upgraded Verra Mobility (VRRM – Research Report) to a Buy, with a price target of $27.00.
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David Koning has given his Buy rating due to a combination of factors that highlight Verra Mobility’s strong market position and potential for growth. Despite the challenging macroeconomic environment, Koning sees this as an opportune time to upgrade the stock, as high-quality companies like Verra Mobility tend to be less pressured by investors during uncertain times. The renewal of the NYC contract, which contributes significantly to the company’s revenue, is a positive development, and there is potential for additional camera installations that could offset any pricing pressures.
Moreover, Koning notes that macroeconomic benefits such as lower interest rates and favorable foreign exchange movements could positively impact the company’s earnings. While there are some headwinds, such as decelerating travel data and investor concerns about leverage, the company’s strong moat in its commercial and government units provides a solid foundation for future growth. The attractive valuation of the stock, along with stable earnings estimates, further supports the Buy rating.