Verizon (VZ) AI Stock Analysis

• Market Cap: $181.00B
• Dividend Yield: 6.26%
• Average Volume (3M): 29.30M
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.34
• Revenue Growth: 0.61%
• EPS Growth: 50.39%
• Country: US
• Employees: 99,600
• Sector: Communication Services
• Sector Strength: 98
• Industry: Telecommunications Services
• EPS (TTM): 4.14
• Shares Outstanding: 4,220,000,000
• 10 Day Avg. Volume: 29,800,078
• 30 Day Avg. Volume: 29,298,241
• PEG Ratio: 0.21
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.37
• Price to Cash Flow (P/CF): 4.40
• P/FCF Ratio: 3.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $46.74
• Price Target Upside: 8.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 19

Verizon's overall stock score reflects strong earnings performance and strategic growth initiatives, particularly in wireless and AI sectors. While the financial performance is robust, ongoing leverage concerns and stagnant revenue growth are key risks. The stock's attractive valuation and dividend yield enhance its appeal, supporting a positive outlook despite some business segment pressures.

Positive Factors

Acquisitions

Verizon's acquisition of Frontier is expected to accelerate fiber reach, reduce churn, and improve financial returns.

Network and Infrastructure

Verizon's network is well-positioned to enable and benefit from AI, specifically its mobile edge computing capabilities and fiber footprint.

Technology and Innovation

5G and margin expansion combined with AI-driven network optimization and operating efficiency expansion is driving a re-acceleration in Business Performance trends and expansion into emerging technologies.

Negative Factors

Competitive Pressure

Aggressive competition from players like AT&T and T-Mobile could impact market share and pricing power.

Consumer Trends

The competitive environment is described as 'unusual', leading to an increase in consumer voice net losses to 325k.

Financial Performance

Muted free cash flow growth and limited near-term catalysts contribute to a neutral rating for Verizon shares.

Verizon Business Overview & Revenue Model

Company Description

Verizon 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 Money

Verizon 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.

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.

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.

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
80.69B	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

• Technical Analysis Sentiment: Positive
• Last Price: 42.92
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 42.92 is below the 20-day moving average (MA) of 43.29, above the 50-day MA of 42.17, and above the 200-day MA of 40.50, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 63.26 is Neutral, neither overbought nor oversold. The STOCH value of 82.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VZ.

Verizon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMUS	82 Outperform	$291.03B	26.37	17.93%	1.20%	3.62%	38.24%
CMCSA	77 Outperform	$133.02B	8.49	19.24%	3.52%	1.78%	11.62%
T	76 Outperform	$190.01B	17.74	10.54%	4.19%	-0.08%	-24.48%
VZ	73 Outperform	$181.00B	10.35	18.27%	6.26%	0.61%	50.39%
CHTR	68 Neutral	$54.98B	9.86	38.11%	―	0.88%	16.44%
AMX	67 Neutral	$42.45B	27.89	7.78%	3.62%	3.15%	-63.12%
Sector *	58 Neutral	$26.94B	3.15	-10.67%	4.32%	2.14%	-43.11%

Verizon Corporate Events

Verizon Increases CEO Incentive Amid Revenue Reclassification

On March 18, 2025, Verizon’s Board of Directors approved an increase in the annual target long-term incentive for CEO Hans Vestberg from $18 million to $25 million, reflecting market competitiveness and his experience. Additionally, Verizon reclassified certain revenues and adjusted its metrics for wireless retail postpaid phone net additions, impacting financial reporting and investor information.

Verizon Projects 2025 Growth Despite Q1 Challenges

At an investor event, Verizon announced that its Consumer Group’s postpaid phone net additions for Q1 2025 are expected to be impacted by increased churn due to recent pricing actions and flat to slightly decreased gross additions compared to the previous year. Despite these challenges, Verizon remains confident in its full-year financial guidance and anticipates generating more Consumer postpaid phone net additions in 2025 than in 2024.

Verizon Board Member Rodney Slater to Step Down

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.