Verizon (VZ) AI Stock Analysis

Compare

24,890 Followers

Top Page

Verizon

(NYSE:VZ)

Rating:79Outperform

Price Target:

$49.00

▲(15.32%Upside)

Verizon's overall stock score reflects its strong financial performance and positive earnings call, which are the most significant factors. The company is well-positioned with a strong market presence and attractive valuation. Technical indicators present a neutral outlook, while elevated postpaid churn poses a challenge.

Positive Factors

Debt Management

Verizon plans to use the additional cash to pay down debt, which can reduce future financial burdens and improve its balance sheet.

Fiber Expansion

Verizon's acquisition of Frontier is expected to significantly accelerate the company's fiber reach, potentially boosting market share and financial returns by reducing churn.

Financial Performance

Verizon posted solid upside in earnings before interest, taxes, depreciation, and amortization (EBITDA), which is a key indicator of the company's financial performance.

Negative Factors

Competitive Pressure

Increased competitive pressure from AT&T and T-Mobile, along with increased fiber deployments, has impacted Verizon's consumer broadband net additions, highlighting challenges in maintaining growth.

Industry Competition

The US wireless industry could slow more dramatically than expected as competition intensifies, leading to low single-digit adjusted EBITDA growth.

Subscriber Challenges

The company's subscriber position remains challenged, which suggests ongoing difficulties in maintaining or growing its customer base.

Verizon (VZ) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$172.19B

Dividend Yield6.38%

Average Volume (3M)17.46M

Price to Earnings (P/E)9.5

Beta (1Y)0.30

Revenue Growth2.05%

EPS Growth61.39%

CountryUS

Employees99,400

SectorCommunication Services

Sector Strength87

IndustryTelecommunications Services

Share Statistics

EPS (TTM)1.22

Shares Outstanding4,216,255,000

10 Day Avg. Volume19,070,153

30 Day Avg. Volume17,460,859

Financial Highlights & Ratios

PEG Ratio4.63

Price to Book (P/B)1.78

Price to Sales (P/S)0.00

P/FCF Ratio8.88

Enterprise Value/Market Cap2.00

Enterprise Value/Revenue0.64

Enterprise Value/Gross Profit4.25

Enterprise Value/Ebitda1.96

Forecast

1Y Price Target

$49.00

Price Target Upside15.32% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering17

Verizon Business Overview & Revenue Model

Company DescriptionVerizon Communications Inc., through its subsidiaries, offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. Its Consumer segment provides postpaid and prepaid service plans; internet access on notebook computers and tablets; wireless equipment, including smartphones and other handsets; and wireless-enabled internet devices, such as tablets, and other wireless-enabled connected devices comprising smart watches. It also provides residential fixed connectivity solutions, such as internet, video, and voice services; and sells network access to mobile virtual network operators. As of December 31, 2021, it had approximately 115 million wireless retail connections, 7 million wireline broadband connections, and 4 million Fios video connections. The company's Business segment provides network connectivity products, including private networking, private cloud connectivity, virtual and software defined networking, and internet access services; and internet protocol-based voice and video services, unified communications and collaboration tools, and customer contact center solutions. This segment also offers a suite of management and data security services; domestic and global voice and data solutions, such as voice calling, messaging services, conferencing, contact center solutions, and private line and data access networks; customer premises equipment; installation, maintenance, and site services; and Internet of Things products and services. As of December 31, 2021, it had approximately 27 million wireless retail postpaid connections and 477 thousand wireline broadband connections. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.

How the Company Makes MoneyVerizon makes money through a diverse range of revenue streams primarily focused on its telecommunications services. The company's largest revenue source is its wireless segment, which includes postpaid and prepaid plans, device sales, and equipment rentals. Customers pay for service plans that provide voice, text, and data services, often bundled with device payment plans. Additionally, Verizon generates revenue from its wireline services, offering broadband internet, video, and voice services primarily through its Fios brand. The company also earns from business solutions, which include network services, cybersecurity, cloud services, and Internet of Things (IoT) offerings. Strategic partnerships and the deployment of 5G technology further enhance its revenue potential, as Verizon collaborates with various industries to expand its network capabilities and service offerings.

Verizon Key Performance Indicators (KPIs)

Any

Consumer Wireless Connections

Consumer Wireless Connections
Tracks the number of active wireless connections, indicating customer base size and growth potential in the competitive telecom market.

Chart InsightsVerizon's consumer wireless connections have shown a steady recovery since 2021, with notable growth in 2024, aligning with the company's strategic focus on expanding postpaid and broadband subscribers. The recent earnings call highlighted a positive outlook for 2025, driven by anticipated growth in wireless service revenue and strategic initiatives like Verizon AI Connect. Despite challenges such as promo amortization and wireline revenue pressures, Verizon's focus on AI and subscriber growth positions it well for sustained performance, supported by a strong financial foundation and increased market share in broadband.

Data provided by:

Main Street Data

Verizon Earnings Call Summary

Earnings Call Date:Jul 21, 2025

(Q2-2025)

% Change Since: 4.04%|

Next Earnings Date:Oct 21, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Verizon's strong financial performance, with record wireless service revenue, adjusted EBITDA growth, and increased free cash flow. The company also achieved significant milestones in network deployment and subscriber growth, leading to a raised full-year guidance. However, challenges such as elevated postpaid churn and pressures in the public sector were noted, although these were mitigated by strategic initiatives and improvements in other areas.

Q2-2025 Updates

Positive Updates

Record Wireless Service Revenue

Verizon reported wireless service revenue of $20.9 billion for Q2 2025, up 2.2% year over year, indicating strong market performance.

Adjusted EBITDA Growth

Adjusted EBITDA for the quarter reached $12.8 billion, up 4.1% from the previous year, marking a record for the best-reported quarter.

Free Cash Flow Increase

The company reported a free cash flow of $5.2 billion for the quarter, bringing the year-to-date free cash flow to $8.8 billion, an increase of over $300 million compared to the first half of 2024.

C-band Deployment Ahead of Schedule

C-band deployment is ahead of schedule, with nearly all sites now standalone capable, enhancing network performance and capacity.

Fixed Wireless Subscribers Milestone

Verizon's fixed wireless base surpassed five million subscribers, demonstrating strong growth in this segment.

J.D. Power and RootMetrics Awards

Verizon was recognized by J.D. Power for best network quality and by RootMetrics for the nation's best, fastest, and most reliable 5G network.

Increased Full-Year Guidance

The company raised its full-year guidance for adjusted EBITDA, adjusted EPS, and free cash flow, driven by strong performance and favorable tax reform.

Broadband Growth

The company delivered 293,000 net broadband additions in the quarter, with a strong performance in both fiber and fixed wireless access.

Negative Updates

Elevated Postpaid Churn

Postpaid churn remained elevated at 0.90%, consistent with the first quarter, due to pricing actions and competitive pressures.

Public Sector Challenges

Verizon faced pressures in the public sector business, which are expected to persist into the second half of the year, affecting phone net additions.

Consumer Postpaid Phone Net Losses

Consumer postpaid phone net losses totaled 51,000 for the second quarter, though this was an improvement from the prior year period.

Company Guidance

During Verizon Communications Inc.'s Second Quarter 2025 Earnings Conference Call, significant financial and operational metrics were highlighted, underscoring the company's robust performance and future guidance adjustments. Verizon reported a market-leading wireless service revenue of $20.9 billion, marking a 2.2% increase from the previous year, and achieved an adjusted EBITDA of $12.8 billion, up 4.1% year-over-year, setting a record for the best-reported quarter. Free cash flow for the quarter was $5.2 billion, bringing the year-to-date figure to $8.8 billion, an increase of over $300 million compared to the first half of 2024. The company raised its full-year guidance for adjusted EBITDA and adjusted EPS, as well as for free cash flow, which is now projected to be between $19.5 billion and $20.5 billion, buoyed by operational execution and positive impacts from tax reform. Operationally, Verizon achieved over 300,000 net additions across mobility and broadband platforms, with significant growth in fixed wireless access, which surpassed five million subscribers. The company is also advancing its C-band deployment and fiber build, aiming to cover 80% to 90% of planned sites by year-end, and remains on track for a 2026 close of the Frontier acquisition, which is expected to further bolster its fiber strategy.

Verizon Financial Statement Overview

Summary

Verizon's financial performance is strong, marked by solid profitability with a net profit margin of 15.42% and robust cash flow, including a free cash flow growth of 29.22%. The balance sheet is stable, though there is room for improvement in reducing debt.

Income Statement

Very Positive

Verizon's income statement demonstrates robust gross and net profit margins, supported by consistent revenue growth over recent years. The TTM (Trailing-Twelve-Months) gross profit margin stands at 69.52%, and a net profit margin of 15.42% reflects strong profitability. Revenue growth rate from 2024 to TTM is 0.37%, indicating stability. While EBIT and EBITDA margins are solid at 21.54% and 33.09% respectively, the slight decrease in net income growth could be a concern.

Balance Sheet

Positive

The balance sheet reveals a solid equity position with a debt-to-equity ratio of 1.64, indicating manageable leverage. The return on equity (ROE) is impressive at 20.45%, suggesting efficient use of equity. However, the equity ratio is moderate at 26.83%, which could indicate room for strengthening the balance sheet further by reducing debt.

Cash Flow

Positive

Cash flow analysis shows a healthy operating cash flow to net income ratio of 1.80, confirming strong cash generation relative to profits. Free cash flow growth is notable at 29.22% from 2024 to TTM. The free cash flow to net income ratio of 1.17 highlights effective conversion of earnings to cash flow, though capital expenditure remains significant.

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
EBITDA	47.52B	40.14B	48.60B	52.87B	48.11B
Net Income	17.51B	11.61B	21.26B	22.07B	17.80B
Balance Sheet
Total Assets	384.71B	380.25B	379.68B	366.60B	316.48B
Cash, Cash Equivalents and Short-Term Investments	4.19B	2.06B	2.60B	2.92B	22.17B
Total Debt	168.36B	174.94B	176.33B	177.93B	150.55B
Total Liabilities	284.14B	286.46B	287.22B	283.40B	247.21B
Stockholders Equity	99.24B	92.43B	91.14B	81.79B	67.84B
Cash Flow
Free Cash Flow	18.92B	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 Price42.49

Price Trends

50DMA

42.33

Positive

100DMA

42.47

Positive

200DMA

41.03

Positive

Market Momentum

MACD

-0.23

Positive

RSI

55.42

Neutral

STOCH

28.46

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 42.49 is above the 20-day moving average (MA) of 41.90, above the 50-day MA of 42.33, and above the 200-day MA of 41.03, indicating a bullish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 55.42 is Neutral, neither overbought nor oversold. The STOCH value of 28.46 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VZ	79 Outperform	$172.19B	9.50	18.26%	6.38%	2.05%	61.39%
TMUS	75 Outperform	$257.98B	22.15	19.35%	1.69%	5.31%	38.46%
CMCSA	74 Outperform	$128.96B	8.48	18.57%	4.54%	1.33%	7.69%
CHTR	71 Outperform	$58.49B	10.78	36.94%	―	0.93%	16.06%
AMX	71 Outperform	$52.39B	31.31	8.54%	4.56%	0.19%	-49.68%
T	65 Neutral	$193.85B	16.54	11.38%	5.07%	0.50%	-12.66%
Sector *	62 Neutral	$41.14B	-1.89	-12.05%	3.52%	2.11%	-69.63%

* Communication Services Sector Average

Performance Comparison

Verizon

42.49

6.05

16.60%

AMX

America Movil

17.16

0.36

2.14%

AT&T

27.38

9.99

57.45%

CHTR

Charter Communications

388.89

68.85

21.51%

CMCSA

Comcast

35.01

-2.21

-5.94%

TMUS

T Mobile US

232.62

58.49

33.59%

Verizon Corporate Events

Private Placements and Financing

Verizon Finalizes Private Exchange Offers for Notes

Neutral

Jun 23, 2025

On June 23, 2025, Verizon announced the final results of its private exchange offers for 10 series of notes and related tender offers. The exchange offers, which expired on June 18, 2025, involved swapping outstanding notes for newly issued 5.401% Notes due 2037. Verizon plans to issue approximately $2.2 billion in new notes, meeting the Minimum Issue Requirement. The company will not receive cash proceeds from these offers, and certain non-covered notes were rejected due to conditions not being satisfied, impacting some stakeholders.