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Verizon Communications Inc VZ

Morningstar Rating
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Stock XNYS Rating as of
$39.11 −0.38 (0.96%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Verizon Earnings: Price Increases Drive Solid Wireless Revenue Growth

Michael Hodel

Verizon’s first-quarter results largely met our expectations. Wireless revenue growth was robust, with recent price increases driving higher sales without spurring significantly higher customer defections. Cash flow was relatively weak, but the first quarter is typically seasonally soft and included a one-off pension contribution. Management also reiterated its 2024 forecast, which calls for free cash flow in the same range as 2023. We expect Verizon to make steady progress growing the business and repaying debt this year, and our fair value estimate remains $54 per share.

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Price vs Fair Value

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VZ is trading at a 29% discount.
Price
$38.60
Fair Value
$67.00
Uncertainty
Medium
1-Star Price
$94.30
5-Star Price
$94.10
Economic Moat
Zhrwtmq
Capital Allocation
Dbbxvtxm

Bulls Say, Bears Say

Bulls

A focus on network strength over the past 15 years has put Verizon in an enviable position. Its wireless network provides the broadest coverage in the industry, and its reputation with customers is sterling.

Bears

Wireless technology is dramatically lowering the cost to build and maintain a network. Rival carriers have rapidly deployed new spectrum and technology to add coverage and capacity. Verizon’s network leadership is a thing of the past.

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Trading Information

Previous Close Price
$39.49
Day Range
$39.07–39.81
52-Week Range
$30.14–43.41
Bid/Ask
$39.11 / $39.12
Market Cap
$164.49 Bil
Volume/Avg
2.1 Mil / 18.5 Mil

Key Statistics

Price/Earnings (Normalized)
8.43
Price/Sales
1.25
Dividend Yield (Trailing)
6.67%
Dividend Yield (Forward)
6.70%
Total Yield
6.70%

Company Profile

Wireless services account for about 70% of Verizon Communications' total service revenue and nearly all of its operating income. The firm serves about 93 million postpaid and 21 million prepaid phone customers (following the acquisition of Tracfone) via its nationwide network, making it the largest US wireless carrier. Fixed-line telecom operations include local networks in the Northeast, which reach about 29 million homes and businesses and serve about 8 million broadband customers. Verizon also provides telecom services nationwide to enterprise customers, often using a mixture of its own and other carriers' networks.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
105,400
Website
https://www.verizon.com

Competitors

Valuation

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Metric
VZ
T
TMUS
Price/Earnings (Normalized)
 8.436.9820.38
Price/Book Value
 1.781.163.02
Price/Sales
 1.251.002.49
Price/Cash Flow
 4.372.997.65
Price/Earnings
VZ
T
TMUS

Financial Strength

Metric
VZ
T
TMUS
Quick Ratio
 0.510.330.68
Current Ratio
 0.690.710.91
Interest Coverage
 4.013.964.30
Quick Ratio
VZ
T
TMUS

Profitability

Metric
VZ
T
TMUS
Return on Assets (Normalized)
 4.66%4.17%4.58%
Return on Equity (Normalized)
 18.99%16.72%14.49%
Return on Invested Capital (Normalized)
 7.89%8.19%6.73%
Return on Assets
VZ
T
TMUS
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