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Verizon Communications (VZ)
:VZ
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Verizon
(NYSE:VZ)73Outperform
Positive Factors
Network Expansion
VZ's acquisition of Frontier Communications further expands its fiber network and increases premium broadband and mobility services.
Revenue Growth
A re-acceleration of mobile and broadband subscriber growth is driving growth in revenue and cash flow along with opportunities in AI driving mobile edge computing and its above-average dividend yield, which continue to create a compelling investment case.
Negative Factors
Competitive Pressure
Aggressive competition from players like AT&T and T-Mobile could impact market share and pricing power.
Verizon (VZ) vs. S&P 500 (SPY)
Market Cap
$181.44B
Dividend Yield6.12%
Average Volume (3M)23.23M
Price to Earnings (P/E)10.4
Beta (1Y)0.42
Revenue Growth0.61%
EPS Growth50.39%
CountryUS
Employees99,600
SectorCommunication Services
Sector Strength85
IndustryTelecommunications
Share Statistics
EPS (TTM)4.14
Shares Outstanding4,209,704,000
10 Day Avg. Volume23,605,782
30 Day Avg. Volume23,225,230
Financial Highlights & Ratios
PEG Ratio0.21
Price to Book (P/B)N/A
Price to Sales (P/S)1.37
Price to Cash Flow (P/CF)4.40
P/FCF Ratio3.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$46.07Price Target Upside7.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Verizon Business Overview & Revenue Model
Company DescriptionVerizon Communications Inc. (VZ) is a leading global telecommunications company headquartered in the United States. The company operates in the telecommunications sector, providing a wide range of services including wireless communication, broadband internet, and digital television to both individual consumers and businesses. Verizon is recognized for its extensive network infrastructure, offering reliable connectivity and innovative solutions to meet the evolving demands of technology and communication.
How the Company Makes MoneyVerizon makes money primarily through its wireless and wireline segments. The wireless segment is the largest contributor to its revenue, generating income from retail and wholesale services, including voice, data, and messaging services. This segment also benefits from equipment sales, such as smartphones and tablets, sold through its retail outlets and online platforms. The wireline segment provides broadband internet, video, and voice services to residential and business customers, contributing significantly to Verizon's earnings. Additionally, Verizon generates revenue through its media and advertising business, leveraging its digital platforms to offer targeted advertising solutions. Strategic partnerships and acquisitions, such as those in the 5G technology space, further enhance Verizon's ability to increase its revenue streams and maintain its competitive edge in the telecommunications industry.
Verizon Financial Statement Overview
Summary
Verizon demonstrates solid operational efficiency and profitability, but faces challenges with its balance sheet due to high leverage and negative equity. Its cash flow position is strong, though capital investments constrain liquidity. Profitability is on a positive trajectory, but growth sustainability and balance sheet health warrant close monitoring.Income Statement
Verizon's income statement reveals steady revenue figures with slight fluctuations. The gross profit margin is robust, indicative of efficient cost management. The net profit margin has improved significantly in the latest period, reflecting enhanced profitability. However, revenue growth remains relatively stagnant, suggesting limited expansion in market share.75
Positive
Balance Sheet
Verizon's balance sheet shows a concerning negative stockholders' equity in the latest period, primarily due to high total debt levels. The debt-to-equity ratio is unfavorable, indicating high leverage and potential risk. Return on equity is not calculable due to negative equity, but historical data suggests declining trends. The equity ratio is weak, implying reliance on debt over equity.55
Neutral
Cash Flow
The cash flow statement highlights strong operating cash flows, supporting liquidity. Free cash flow has shown growth, suggesting an improvement in cash generation capabilities. However, the high capital expenditures impact cash reserves. The operating cash flow to net income ratio is favorable, indicating efficient cash earnings from operations.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 134.79B | 133.97B | 136.84B | 133.61B | 128.29B | Gross Profit |
| 134.79B | 79.09B | 77.70B | 77.31B | 77.09B | EBIT |
| 28.69B | 22.88B | 30.47B | 32.45B | 28.80B | EBITDA |
| 47.52B | 40.14B | 48.60B | 52.87B | 48.11B | Net Income Common Stockholders |
| 17.51B | 11.61B | 21.26B | 22.07B | 17.80B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 2.06B | 2.60B | 2.92B | 22.17B | Total Assets |
| 384.71B | 380.25B | 379.68B | 366.60B | 316.48B | Total Debt |
| 26.14B | 174.94B | 150.64B | 150.87B | 129.06B | Net Debt |
| 26.14B | 172.88B | 148.03B | 147.95B | 106.89B | Total Liabilities |
| 26.14B | 286.46B | 287.22B | 283.40B | 247.21B | Stockholders Equity |
| -7.80B | 92.43B | 91.14B | 81.79B | 67.84B |
| Cash Flow | Free Cash Flow | |||
| 36.91B | 18.71B | 10.40B | 19.25B | 21.45B | Operating Cash Flow |
| 36.91B | 37.48B | 37.14B | 39.54B | 41.77B | Investing Cash Flow |
| -18.67B | -23.43B | -28.66B | -67.15B | -23.51B | Financing Cash Flow |
| -17.10B | -14.66B | -8.53B | 8.28B | 1.32B |
Verizon Technical Analysis
Positive
42.87
Price Trends
40.17
Positive
40.88
Positive
40.37
Positive
Market Momentum
0.96
Negative
61.58
Neutral
69.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VZ, the sentiment is Positive. The current price of 42.87 is above the 20-day moving average (MA) of 41.73, above the 50-day MA of 40.17, and above the 200-day MA of 40.37, indicating a bullish trend. The MACD of 0.96 indicates Negative momentum. The RSI at 61.58 is Neutral, neither overbought nor oversold. The STOCH value of 69.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VZ.
Verizon Risk Analysis
Verizon disclosed 17 risk factors in its most recent earnings report. Verizon reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Verizon Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $134.23B | 8.57 | 18.92% | 3.45% | 1.78% | 11.62% | |
76 Outperform | $188.21B | 17.58 | 9.26% | 4.00% | -0.08% | -24.48% | |
76 Outperform | $302.16B | 27.38 | 18.37% | 1.12% | 3.62% | 38.24% | |
74 Outperform | $58.37B | 10.47 | 38.11% | ― | 0.88% | 16.44% | |
73 Outperform | $181.44B | 10.40 | -224.44% | 6.12% | 0.61% | 50.39% | |
61 Neutral | $6.47B | ― | -17.67% | ― | 34.38% | 24.90% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
VZ
Verizon
42.87
5.07
13.41%
T
AT&T
26.22
9.99
61.55%
CHTR
Charter Communications
368.36
87.51
31.16%
CMCSA
Comcast
35.50
-5.26
-12.90%
TMUS
T Mobile US
264.65
101.06
61.78%
S
SentinelOne
19.90
-5.60
-21.96%
Verizon Earnings Call Summary
Earnings Call Date: Jan 24, 2025 | % Change Since: 9.42% | Next Earnings Date: Apr 22, 2025
Earnings Call Sentiment Positive
Verizon reported strong financial performance, subscriber growth, and strategic advancements in AI, offset by headwinds from promo amortization and wireline revenue pressures. The sentiment is cautiously optimistic with a positive outlook for 2025.Highlights
Strong Financial Performance
Verizon delivered on its financial guidance with 3.1% wireless service revenue growth and 2.1% adjusted EBITDA growth, both exceeding the midpoint of guided ranges.
Subscriber Growth
Added nearly 2.5 million postpaid mobility and broadband subscribers in 2024, with nearly 900,000 postpaid phone net adds and a positive turnaround in prepaid net adds.
Broadband Market Share Increase
Added nearly 1.6 million broadband subscribers, with a significant contribution from fixed wireless access, and grew market share in 2024.
AI Strategy and Verizon AI Connect
Launched Verizon AI Connect, leveraging existing assets to meet the growing demand for AI applications, with a potential $40 billion TAM.
Debt Reduction and Dividend Increase
Continued debt pay-down, ending the year with a net unsecured debt to adjusted EBITDA ratio of 2.3x, and raised the dividend for the 18th consecutive year.
Lowlights
Promo Amortization Headwinds
Expected to peak in 2025, impacting growth rates, although underlying customer economics remain healthy.
Pressure in Business Wireline Revenues
Continued pressure in business wireline revenues, which is partially offsetting growth in other areas.
Higher Tax Burden
Faced pressure from cash taxes due to bonus depreciation, impacting free cash flow.
Company Guidance
During the Verizon Q4 2024 earnings call, the company provided guidance for 2025, highlighting several key financial metrics and strategic initiatives. Verizon expects total wireless service revenue to grow between 2% and 2.8%, driven by improving postpaid consumer phone net additions, healthy business phone volumes, and scaling fixed wireless access. Adjusted EBITDA is projected to grow by 2% to 3.5%, reflecting higher wireless service revenue and ongoing cost transformation initiatives, despite pressures in business wireline revenues. Additionally, full-year adjusted earnings per share growth is anticipated to be flat to up 3%, with capital spending forecasted between $17.5 billion and $18.5 billion. Free cash flow is expected to range from $17.5 billion to $18.5 billion, excluding the impact of the pending Frontier acquisition. The company also discussed its strategic focus on AI, introducing Verizon's AI Connect to capitalize on the growing demand for AI applications, leveraging their existing network and data center assets to drive future growth.Verizon Corporate Events
Executive/Board ChangesShareholder Meetings
Verizon Board Member Rodney Slater to Step Down
Neutral
Feb 10, 2025
Rodney E. Slater, a board member of Verizon Communications Inc., announced on February 5, 2025, that he will not seek re-election at the company’s 2025 annual shareholders’ meeting. This decision may impact the company’s board composition, signaling potential changes in governance or strategic direction.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.