Verra Mobility: A Toll Road on a Toll Road With Ben Tewey (Ticker: VRRM)
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Show Notes
This week we brought on Ben Tewey, author of Vestrule Capital, to discuss Verra Mobility. Here are some questions we asked him:
How’d you find Verra Mobility? What do you think of their choice to go public via a SPAC?
Can you describe Verra’s different business lines and the economics of each?
What are Verra’s largest costs? Is there some operating leverage here? If so, why?
What’s going to drive growth from here? What are some of the tailwinds that Verra benefits from?
What do you think of Verra’s acquisitions so far? Would you prefer to see buybacks or further M&A at current prices?
What are the biggest risks to Verra’s business?
Verra’s commercial business is obviously affected by the customer volumes at the rental car companies. How have those businesses performed recently? What are the overall trends in the rental car industry? Would Turo be a headwind for Verra?
How much cash do you think Verra can generate? Why do you think the market is undervaluing them?
Premortem: How could this turn into a poor investment?
Disclosure: The author and podcast guests are not your financial advisors. Ryan Henderson and Brett Schafer are general partners and portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this show.