Core Thesis - Verra Mobility Corporation (VRRM) is positioned as a compelling investment opportunity due to its strong market presence, growth potential, and underappreciated contracts, particularly with New York City [1][4]. Company Overview - Verra Mobility Corporation operates in smart mobility technology solutions across the United States, Australia, Europe, and Canada, focusing on two main segments: Commercial Services (CS) and Government Solutions (GS) [2]. - The company holds a market share of over 90% in CS and 70% in GS, indicating strong competitive positioning [3]. Segment Performance - CS is experiencing high-single-digit growth driven by the rise of cashless tolling and increased toll-road usage, while GS growth is accelerating due to new legislation and the expansion of automated traffic enforcement programs [3]. - The largest customer, New York City, contributes $139 million in annual service revenue, with a recently secured five-year contract valued at $963 million, which includes a 25% increase in recurring service revenue compared to 2024 [3]. Financial Outlook - The consolidated business is projected to generate significant free cash flow, with an estimated $266 million by 2028, and the stock is currently trading at a forward free cash flow yield of approximately 5% [4]. - The anticipated growth in both CS and GS segments is expected to exceed consensus estimates for FY26 and FY27, supported by stronger-than-expected throughput and travel demand [4]. Investment Catalysts - Near-term catalysts include the official announcement of the NYC contract and potential upgrades from analysts, which could further enhance the stock's appeal [4].

Core Insights - A recent survey by Verra Mobility indicates that over 75% of Americans have a positive or neutral view towards road usage charging, suggesting a shift in funding preferences for infrastructure projects [1][2] Survey Findings - 51% of respondents support toll roads for funding transportation projects, with 30% neutral and 20% against [5] - 93% of participants believe that infrastructure in their state requires improvement [5] - 73% of Americans think that electric vehicle (EV) owners should pay an 'energy tax' to recoup funds for infrastructure [5] Perceptions of Toll Roads - 67% of respondents find toll roads fairer than taxes [6] - 76% accept paying tolls if the revenue is used for improving road and bridge quality [6] - 72% believe everyone should pay the same toll rate [6] - 75% think tolls should remain constant regardless of the time of day [6] - 65% would be more willing to pay tolls if they knew the revenue was dedicated to infrastructure projects that benefit them directly [6] - 67% believe tolls should be eliminated once a project is fully funded [6] Industry Context - The U.S. tolling market was valued at approximately $12.5 billion in 2022 and is projected to grow to $18.6 billion by 2030 [4] - The federal gas tax, a traditional funding source for infrastructure since 1932, is declining due to the rise in EV sales, with Pennsylvania experiencing a $250 million drop in gas tax revenue from 2019 to 2024 [3] Company Overview - Verra Mobility is a leading provider of smart mobility technology solutions, processing over 300 million tolls and violations annually for more than seven million vehicles worldwide [7][9] - The company aims to help fleet owners manage toll payments efficiently, ensuring accurate billing and seamless travel across toll networks [7]