What Happened?

Shares of traffic solutions company Verra Mobility (NYSE:VRRM) fell 12.2% in the morning session after the company reported mixed fourth quarter 2024 results as its EBITDA forecast came in a little shy of expectations. Despite this, revenue increased 5% year-on-year, driven by strong demand in the Commercial Services and Government Solutions segments, with travel-related tolling activity and automated traffic enforcement programs contributing to the gains​. However, the Parking Solutions segment underperformed, with a 13% revenue decline and a goodwill impairment charge, which weighed on overall profitability​. Looking ahead, the company guided for 2025 revenue growth of up to 6%, with adjusted EBITDA expected to improve, though at a slower pace than analysts had hoped​. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The market seemed to focus on the negatives.

The shares closed the day at $22.88, down 11.7% from previous close.

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What The Market Is Telling Us

Verra Mobility’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Verra Mobility and indicate this news significantly impacted the market’s perception of the business.

Verra Mobility is down 4.8% since the beginning of the year, and at $22.89 per share, it is trading 25.8% below its 52-week high of $30.84 from July 2024. Investors who bought $1,000 worth of Verra Mobility’s shares 5 years ago would now be looking at an investment worth $1,511.

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