VRRM Should I Buy
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VRRM is not a good buy right now. Despite being extremely oversold (RSI_6 ~5) and showing very bullish options positioning (very low put/call ratios), the primary trend is still bearish (SMA_200 > SMA_20 > SMA_5 and MACD histogram negative and widening). The stock also closed below the first key support (S1 ~19.59) at ~19.31, which keeps downside risk open toward ~18.78 before a sustainable reversal is confirmed. I would avoid initiating a new position today and only reconsider after price reclaims ~19.60–20.90 with momentum improving.
Trend is decisively bearish: moving averages are stacked bearishly (SMA_200 > SMA_20 > SMA_5), and MACD histogram is -0.362 and negatively expanding (downtrend strengthening). However, RSI_6 at 5.33 signals an extreme oversold condition, which often precedes a short-term relief bounce—but that is not the same as a confirmed trend reversal. Key levels: the stock closed at ~19.31, below S1 (19.59), so that prior support is now overhead resistance; next support is S2 (18.776). A bullish stabilization would more credibly start if VRRM reclaims ~19.59 and then the pivot area (20.91).
Business development: partnership with Locauto to launch electronic toll payment solutions across 100+ rental locations in Italy (supports international expansion/adjacent growth).
Demand tailwinds: surveys showing strong parent support for automated enforcement/safety cameras in school zones (supports broader adoption narrative for automated enforcement solutions).
Fundamentals: latest reported quarter shows solid YoY growth in revenue, net income, and EPS.
Price action/technical pressure: strong downtrend with weakening momentum (MACD negative and expanding) and price breaking below a key support level (~19.59).
Risk items highlighted by the Street: customer concentration and regulatory changes (potential headline/contract risk).
Margin trend: gross margin declined YoY in the latest quarter (80.4%, -3.46% YoY), which may concern investors if it persists.
Latest quarter provided: 2025/Q3. Revenue grew to ~$261.94M (+16.13% YoY), net income rose to ~$46.84M (+34.86% YoY), and EPS increased to ~$0.29 (+38.10% YoY), indicating strong bottom-line leverage. The main soft spot in the snapshot is gross margin, which slipped to ~80.4% (-3.46% YoY). Overall, growth trends look healthy, but the market is currently trading the stock as if momentum is deteriorating.
Recent analyst action: On 2026-01-26, JPMorgan initiated coverage at Neutral with a $25 price target (~17% upside). The tone is constructive on long-term fundamentals (market leadership, recurring revenue) but balanced by risks (customer concentration, regulatory) and the view that a better entry point may emerge. Net takeaway: Wall Street’s visible stance here is mildly positive on value/upside, but not confident enough to recommend buying immediately. Influential/insider flow: Hedge funds and insiders are reported Neutral with no significant recent trends. Congress trading: no recent data in the last 90 days.
