Critical Review: Verra Mobility (NASDAQ:VRRM) and Flywire (NASDAQ:FLYW)

Flywire (NASDAQ:FLYW) and Verra Mobility (NASDAQ:VRRM) are both small-cap computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Profitability

This table compares Flywire and Verra Mobility’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flywire	4.45%	3.78%	2.61%
Verra Mobility	13.38%	55.59%	10.83%

Analyst Recommendations

This is a summary of recent ratings and price targets for Flywire and Verra Mobility, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flywire	0	5	9	1	2.73
Verra Mobility	3	7	0	0	1.70

Flywire presently has a consensus price target of $18.07, suggesting a potential upside of 14.02%. Verra Mobility has a consensus price target of $6.83, suggesting a potential upside of 53.90%. Given Verra Mobility’s higher possible upside, analysts clearly believe Verra Mobility is more favorable than Flywire.

Volatility and Risk

Flywire has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500. Comparatively, Verra Mobility has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Institutional and Insider Ownership

95.9% of Flywire shares are held by institutional investors. 5.0% of Flywire shares are held by insiders. Comparatively, 1.3% of Verra Mobility shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Flywire and Verra Mobility”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flywire	$623.03 million	3.14	$13.50 million	$0.23	68.91
Verra Mobility	$979.08 million	0.69	$136.63 million	$0.82	5.41

Verra Mobility has higher revenue and earnings than Flywire. Verra Mobility is trading at a lower price-to-earnings ratio than Flywire, indicating that it is currently the more affordable of the two stocks.

Summary

Flywire beats Verra Mobility on 8 of the 15 factors compared between the two stocks.

About Flywire

Flywire Corporation, together with its subsidiaries, operates as a payments enablement and software company in the United States and internationally. Its payment platform and network, and vertical-specific software help clients to get paid and help their customers to pay. The company’s platform facilitates payment flows across multiple currencies, payment types, and payment options, as well as provides direct connections to alternative payment methods, such as Alipay, Boleto, PayPal/Venmo, and Trustly. It serves education, healthcare, travel, and business to business organizations. The company was formerly known as peerTransfer Corporation and changed its name to Flywire Corporation in December 2016. Flywire Corporation was incorporated in 2009 and is headquartered in Boston, Massachusetts.

About Verra Mobility

Verra Mobility Corporation provides smart mobility technology solutions and services in the United States, Australia, Canada, and Europe. It operates through three segments: Commercial Services, Government Solutions, and Parking Solutions. The Commercial Services segment provides automated toll and violations management, and title and registration services to rental car companies, fleet management companies, and other large fleet owners. The Government Solutions segment offers automated safety solutions to national, state, and local government agencies, including services and technologies that enable photo enforcement through road safety cameras to detect and process traffic violations for red-light, speed, school bus, and city bus lanes. This segment serves municipalities, counties, school districts, and law enforcement agencies. The Parking Solutions segment provides an integrated suite of parking software and hardware solutions to universities, municipalities, parking operators, healthcare facilities, and transportation hubs. Verra Mobility Corporation was incorporated in 2016 and is headquartered in Mesa, Arizona.