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Verizon Communications Inc VZ

Morningstar Rating
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Stock XNYS Rating as of
$40.09 +0.14 (0.35%)
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As of Delayed Price Closed
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Company Report

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Verizon Earnings: Cash Flow Looks a Touch Weak Despite Solid Wireless Growth

Michael Hodel

Verizon shares are trading sharply lower on earnings for the second consecutive quarter despite results generally in line with our forecast and management reiterating 2024 expectations. We suspect investors are focused on messy wireless customer numbers, a potential wave of costly phone upgrades later this year, and the pacing of free cash flow. We don’t believe these issues are cause for concern, but we’ve made a handful of small adjustments to our forecast, reducing our fair value estimate to $53 from $54.

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Price vs Fair Value

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VZ is trading within a range we consider fairly valued.
Price
$40.09
Fair Value
$64.00
Uncertainty
Medium
1-Star Price
$27.49
5-Star Price
$39.10
Economic Moat
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Capital Allocation
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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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News

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Trading Information

Previous Close Price
$39.95
Day Range
$39.65–40.17
52-Week Range
$30.14–43.42
Bid/Ask
$40.02 / $40.04
Market Cap
$168.76 Bil
Volume/Avg
15.9 Mil / 17.4 Mil

Key Statistics

Price/Earnings (Normalized)
8.72
Price/Sales
1.26
Dividend Yield (Trailing)
6.64%
Dividend Yield (Forward)
6.64%
Total Yield
6.64%

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
CMCSA
Price/Earnings (Normalized)
 8.728.279.52
Price/Book Value
 1.771.291.85
Price/Sales
 1.261.121.32
Price/Cash Flow
 4.313.355.77
Price/Earnings
VZ
T
CMCSA

Financial Strength

Metric
VZ
T
CMCSA
Quick Ratio
 0.460.300.54
Current Ratio
 0.630.700.66
Interest Coverage
 3.543.625.82
Quick Ratio
VZ
T
CMCSA

Profitability

Metric
VZ
T
CMCSA
Return on Assets (Normalized)
 4.55%4.00%6.39%
Return on Equity (Normalized)
 18.30%15.59%20.23%
Return on Invested Capital (Normalized)
 7.96%7.87%10.84%
Return on Assets
VZ
T
CMCSA
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Telecom Services Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
T-Mobile US Inc
TMUS
WskfqtxfvgJhxkds$206.3 Bil
 Comcast Corp Class A
CMCSA
MjjsxjjXbnbf$153.8 Bil
 AT&T Inc
T
TjsLvklyc$136.3 Bil
 Deutsche Telekom AG ADR
DTEGY
FxmgqqnvmXlmbft$131.0 Bil
 KDDI Corp ADR
KDDIY
WpgqgprZzzls$61.1 Bil
 Charter Communications Inc Class A
CHTR
BldmzhrKlrcd$52.5 Bil
 America Movil SAB de CV ADR - Series B
AMX
YjbzxdmcNllxry$52.0 Bil
 BCE Inc
BCE
WdbpjzhqtvFfmjf$30.5 Bil
 Orange SA ADR
ORAN
BqkhlhgvBvyhz$29.6 Bil

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