Skip to Content
Stock Analyst Update

Wireless Customer Growth Remains Strong at Verizon

We don’t expect to materially change our $58 fair value estimate, and we view the shares as fairly valued.

Mentioned:

Price cuts on unlimited wireless plans in mid-2019 drove strong customer growth at Verizon (VZ) during the fourth quarter, with modest pressure on average revenue per customer. The firm’s share of postpaid phone customer growth among the four major carriers was the highest it’s been in more than two years. The firm also defended its wireless network plans in the wake of recent reports that its performance has slipped relative to rivals and persistent concerns that it lacks the spectrum depth needed to maintain quality. We believe Verizon’s competitive position remains solid, built primarily on scale advantages. We also expect Verizon will make investments needed to maintain its strong reputation with customers, limiting returns on invested capital. We don’t expect to materially change our $58 fair value estimate, and we view the shares as fairly valued.

Verizon added 790,000 net retail postpaid phone customers, its best performance in six years. Customer defections (churn) have inched up slightly amid a more promotional competitive environment, but Verizon has also improved its standing with customers looking for a new carrier. The firm claimed roughly 35% of the gross postpaid phone customers added across the four national carriers, its best share in at least three years. As a trade-off, though, average revenue per account declined sequentially for the first time in 2019, dropping 0.7%, slightly worse than our expectation. Wireless service revenue increased 2.7% year over year, in line with the prior quarter.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Michael Hodel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.