Key Stats for VZ Stock
- This-Week Performance: 4%
- 52-Week Range: $38 to $51
- Valuation Model Target Price: $60
- Implied Upside: 18%
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What Happened?
Verizon Communications Inc. stock rose about 4% this week, finishing near $51 per share as investors reacted to renewed interest in high dividend telecom stocks and updates from management highlighting improving cash flow and cost discipline.
Shares moved higher this week after CEO Dan Schulman outlined Verizon’s turnaround strategy and stronger cash flow outlook at the Morgan Stanley Technology, Media & Telecom Conference, reinforcing confidence that the company is shifting back toward subscriber growth and operational efficiency.
Management said Verizon has already removed about $9 billion in costs, including $5 billion in operating expenses and $4 billion in capital spending, while guiding free cash flow to at least $21.5 billion in 2026.
Schulman said the company is shifting its strategy toward subscriber growth, noting that “Verizon is no longer willing to seed market share that we were going to grow through volumes.”
Investor positioning data also drew attention this week. Short interest jumped 34.8% to about 148 million shares as of Feb. 13, representing roughly 3.5% of Verizon’s shares outstanding with a days-to-cover ratio of 3.3, signaling a notable increase in bearish positioning even as the stock moved higher.
At the same time, recent institutional filings showed mixed positioning across major investors. Elo Mutual Pension Insurance boosted its Verizon stake 19% to about 398,000 shares valued near $17.5 million, while several firms reduced exposure including Laurel Wealth Advisors, which cut its stake 97.8%, London & Capital Asset Management, which trimmed 59.9%, and Erste Asset Management, which reduced its position 93%.
Other investors including Intech Investment Management cut holdings 52.5%, while American Century Companies slightly increased its stake 1.5% to nearly 13 million shares valued around $570 million.
Overall, institutional investors still own about 62% of Verizon, highlighting continued large investor participation despite selective portfolio repositioning.
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Is VZ Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 2.2%
- Operating Margins: 24.2%
- Exit P/E Multiple: 8.6x
Verizon’s revenue outlook remains steady, with sales expected to gradually increase as wireless pricing stability, broadband expansion, and subscriber growth support incremental top line gains.
Margin improvement could also help drive earnings growth as the company moves beyond its peak 5G investment cycle, which may allow operating margins to improve while capital spending moderates.
Another important growth driver is fixed wireless broadband, where Verizon uses its wireless network to deliver home internet service. This allows the company to add broadband customers without building expensive fiber infrastructure, improving returns on its existing network investments.
The company is also expanding its fiber footprint following the Frontier acquisition, which increases Verizon’s reach to more than 30 million homes passed and could create additional cross selling opportunities between wireless and broadband services.
Based on these assumptions, the valuation model estimates a target price of about $60, implying roughly 18% potential upside from current levels, suggesting the stock appears modestly undervalued if Verizon continues executing on subscriber growth, broadband expansion, and improving free cash flow.
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How Much Upside Does VZ Stock Have From Here?
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All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
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