Verra Mobility (NASDAQ:VRRM) Corporation (NASDAQ:VRRM), a provider of transportation services with a market capitalization of $3.91 billion and impressive gross profit margins of 61%, announced on Monday an expansion of its stock repurchase program.
According to InvestingPro analysis, the company maintains a healthy financial position with liquid assets exceeding short-term obligations. The company's Board of Directors has authorized an additional $100 million for the repurchase of its Class A common stock, supplementing the existing program initiated in October 2023.
With this new authorization and the remaining $12.7 million from the previous allowance, Verra Mobility now has approximately $112.7 million available for stock buybacks.
The repurchase initiative is set to continue until April 30, 2025, and will involve open market transactions, private negotiations, and potentially Rule 10b5-1 trading plans and accelerated share repurchase agreements, subject to market conditions and other factors. The company's strong current ratio of 2.61 and moderate debt levels support this capital allocation decision.
The company, however, is not committed to repurchasing any specific number of shares and may adjust, suspend, or discontinue the program at its discretion. The timing and volume of repurchases will be influenced by market prices, business and market conditions, legal requirements, and other investment opportunities.
This announcement includes forward-looking statements, which involve certain risks and uncertainties that could cause actual results to differ from those projected. Verra Mobility has indicated that it will not update forward-looking statements unless required by law, and these statements should not be regarded as a guarantee of future performance.
The information for this article is based on a press release statement. For a comprehensive analysis of Verra Mobility's valuation and financial health metrics, investors can access detailed Pro Research Reports available on InvestingPro, which provides in-depth analysis of over 1,400 US stocks, including 12 key insights about VRRM's current market position.
In other recent news, Verra Mobility reported a strong third quarter, with revenues up by 11% to $109 million. This growth was largely driven by robust demand in the Commercial Services segment, particularly in RAC tolling, and a 7% increase in Government Solutions service revenue, attributed to customer expansions and new programs.
Despite challenges such as a transition in the T2 Systems segment and decelerating travel demand due to hurricanes, the company remains positive about its future growth, underpinned by strategic investments and operational enhancements.
Verra Mobility also achieved a record free cash flow of $85 million for the quarter, and adjusted EPS rose to $0.32, marking a 10% increase from the same period last year. The company secured $22 million in new contract awards, contributing to $45 million in year-to-date incremental annual recurring revenue. The full-year 2024 guidance remains unchanged, with revenue and adjusted EBITDA growth expected at about 8% and 9%, respectively.
Looking ahead, Verra Mobility anticipates revenue growth in 2025 at the low end of the 6% to 8% long-term target and expects low to mid-single-digit adjusted EBITDA growth in the same year. The company also plans to maintain a net leverage target of three times, focusing on growth, M&A opportunities, and share repurchases.
These recent developments highlight Verra Mobility's resilience and strategic foresight in navigating challenges and seizing growth opportunities.
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