TLDR
- Verra Mobility (VRRM) plunged over 46% in premarket trading Wednesday after Avis Budget Group terminated its contract, effective September 2026.
- The contract loss will cut annualized commercial services revenue by $135Mā$145M and segment profit by $120Mā$125M.
- Full-year 2026 revenue guidance was lowered to $985Mā$995M, down from $1.02Bā$1.03B.
- CEO David Roberts said the company was “surprised and disappointed” by the termination notice.
- Baird downgraded VRRM to Neutral from Outperform and slashed its price target to $8 from $20.
Verra Mobility stock was trading around $13.08 Wednesday, down more than 46% in premarket after the company revealed late Tuesday that Avis Budget Group is walking away from their contract. The termination is effective September 2026.
Verra Mobility Corporation, VRRM
The Avis contract accounts for roughly 13.5% of Verra Mobility’s 2025 revenue ā so this isn’t a small hit. The company said the loss will reduce commercial services annualized revenue by $135 million to $145 million, with segment profit taking a $120 million to $125 million annual hit before any cost-cutting measures kick in.
CEO David Roberts didn’t mince words. “We were surprised and disappointed to receive this notice from Avis Budget Group given our longstanding partnership and the significant time invested by both parties in ongoing extension negotiations,” he said.
Roberts added that the company is now moving to cut costs, adapt operations, and reposition for growth.
Avis Budget Group had not commented at the time of reporting.
Guidance Cut
Verra Mobility revised its full-year 2026 outlook across the board. Total revenue is now expected to land between $985 million and $995 million, down from the $1.02 billion to $1.03 billion range it issued earlier this month.
Adjusted EBITDA was cut to $380 millionā$385 million, from the prior range of $405 millionā$415 million.
Adjusted EPS guidance dropped to $1.19ā$1.25 from $1.32ā$1.38, and free cash flow guidance was trimmed to $140 millionā$150 million from $150 millionā$160 million.
It’s a sweeping downgrade to the financial outlook for a company that was already showing cracks in its commercial segment.
Analyst Reaction
Baird moved quickly. Analyst David Koning cut his rating on VRRM to Neutral from Outperform and slashed the price target to $8 from $20.
Koning flagged that leverage now rises to roughly 3.5 times on a pro forma basis. He also noted that if Verra were to lose Enterprise or Hertz ā both contracts up for renewal in 2027 ā the entire viability of the commercial segment would come into question. FISV, FIS, and GPN trade around 4ā7 times 2027 estimated EPS at similar leverage, which Baird says would put VRRM at roughly $4 to $8 per share on that same multiple.
Six analysts have revised their earnings estimates lower for the upcoming period, according to InvestingPro data.
Prior to this news, Verra Mobility had reported Q1 2026 revenue of $223.6 million, marginally ahead of expectations, with adjusted EPS of $0.25 versus a forecast of $0.24. But commercial services revenue had already slipped 4% year-over-year in that quarter to $97.8 million, a warning sign that was hiding in plain sight.
The stock had already lost 41.6% year-to-date through Tuesday’s close and was down 44% over the trailing 12 months. Wednesday’s drop puts it near its 52-week low of $12.83.
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