Verizon (VZ) AI Stock Analysis

• Market Cap: $186.15B
• Dividend Yield: 6.18%
• Average Volume (3M): 24.69M
• Price to Earnings (P/E): 10.3
• Beta (1Y): 0.28
• Revenue Growth: 0.93%
• EPS Growth: 56.97%
• Country: US
• Employees: 99,400
• Sector: Communication Services
• Sector Strength: 82
• Industry: Telecommunications Services
• EPS (TTM): 1.19
• Shares Outstanding: 4,216,255,000
• 10 Day Avg. Volume: 21,095,780
• 30 Day Avg. Volume: 24,685,225
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.92
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 4.44
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $47.64
• Price Target Upside: 9.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

Verizon is financially strong with solid profitability and cash flow, though slight concerns exist with net income growth and debt levels. The stock's valuation is appealing with a low P/E and high dividend yield. Technical indicators are mixed, suggesting consolidation. The recent earnings call was positive, despite some challenges in customer retention, reflecting a stable outlook.

Positive Factors

Earnings

Strong first quarter results, which included wireless service revenue growth of 2.7% and adj. EBITDA growth of 4.0% position VZ to deliver on its full year guidance.

Strategic Investments

Ongoing investments in wireless and wireline infrastructure, along with AI-driven network optimization, are expected to enhance Verizon's business performance.

Negative Factors

Competition

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

Consumer Segment Performance

Verizon posted downside Consumer phone losses, among the worst 1Q losses in company history.

Verizon Business Overview & Revenue Model

Company Description

Verizon 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 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's financials are strong, with robust profitability and cash flow generation. Income stability is solid, although net income growth shows slight decline. The balance sheet is stable but could improve with debt reduction.

Income Statement

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

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

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
	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
4.19B	2.06B	2.60B	2.92B	22.17B
	Total Assets
384.71B	380.25B	379.68B	366.60B	316.48B
	Total Debt
168.36B	174.94B	150.64B	150.87B	129.06B
	Net Debt
164.16B	172.88B	148.03B	147.95B	106.89B
	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 Price: 43.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 43.61 is above the 20-day moving average (MA) of 43.45, above the 50-day MA of 43.34, and above the 200-day MA of 40.96, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 52.03 is Neutral, neither overbought nor oversold. The STOCH value of 73.08 is Neutral, 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
VZ	79 Outperform	$186.15B	10.34	18.23%	6.18%	0.93%	56.97%
CHTR	76 Outperform	$112.86B	11.15	36.94%	―	0.93%	16.06%
CMCSA	75 Outperform	$128.78B	8.46	18.57%	3.68%	1.33%	7.69%
TMUS	73 Outperform	$288.18B	24.20	19.35%	1.24%	5.31%	38.46%
T	72 Outperform	$202.63B	16.89	11.38%	4.04%	0.50%	-12.66%
AMX	71 Outperform	$52.64B	31.40	8.54%	3.00%	0.19%	-50.17%
Sector *	60 Neutral	$13.50B	7.33	-2.74%	3.80%	2.09%	-39.49%

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.