VRRM Stock Hits Record Lows – This Analyst Says Verra’s Commercial Services Moat Weakened By Avis Deal Termination

• Morgan Stanley noted that the termination of the deal with Avis casts doubt on the commercial services segment’s long-term growth projections. 
• William Blair has downgraded the stock to ‘Market Perform’ from ‘Outperform,’ stating that the loss of customers such as Avis is a ‘major blow’ for Verra.
• The termination of Avis' contract came as a clear shock," said JPMorgan analyst Tomohiko Sano.

Shares of Verra Mobility (VRRM) nosedived more than 71% on Wednesday, hitting a record low as multiple analysts cut price targets and downgraded the stock following Avis' termination of its agreement with the company.

Wall Street Slashes VRRM Price Target

Morgan Stanley analyst James Faucette has lowered Verra Mobility’s price target to $4 from $15 and kept an ‘Equal Weight’ rating on the stock, according to TheFly.

The firm stated that the termination of the deal 'meaningfully weakens confidence’ in Verra’s commercial services moat and casts doubt on this segment’s long-term growth projections. However, the firm believes the stock largely reflects this uncertainty given its current trading levels.

Meanwhile, William Blair has downgraded the stock to ‘Market Perform’ from ‘Outperform.’ The firm stated that the loss of customers such as Avis is a ‘major blow’ for Verra as its rental car tolling business carries a 65% earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. Blair now believes the shares will be ‘range-bound’ over the next 12 months, though it noted an upside scenario in which Avis could return if it encounters challenges in switching to a different solution.

JPMorgan analyst Tomohiko Sano also lowered Verra’s rating to ‘Underweight’ from ‘Neutral’ and cut the price target of the stock to $8 from $17. "The termination of Avis' contract came as a clear shock," stated Sano, adding that the contract loss and margin pressure from the New York City contract "warrant a cautious stance."

Avis Walks Away From VRRM

On Tuesday, Verra Mobility stated it received a termination notice from Avis Budget regarding their contract, effective September 2026. As a result, the company is cutting costs and reallocating resources tied to Avis to other customers.

The termination is expected to reduce Commercial Services' 2026 annualized revenue by about $135 million to $145 million and segment profit by $120 million to $125 million, before cost reduction initiatives. 

The company revised its full-year 2026 outlook to total revenue of $985 million to $995 million, adjusted earnings per share of $1.19 to $1.25, and free cash flow of $140 million to $150 million.

Previously, the company expected 2026 total revenue of $1.02 billion to $1.03 billion, adjusted earnings per share in the range of $1.32 to $1.38, and free cash flow of $150 million to $160 million.

What Retails Thinks About VRRM

The retail sentiment surrounding the stock has improved to  ‘extremely bullish’ from ‘neutral’ while message volumes increased to ‘extremely high’ from ‘normal’ over the past 24 hours.

Shares of Verra Mobility have declined by over 82% year to date.

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