Key Takeaways
- Verizon fell 2.2% to $44 on October 21 after AT&T slid on weaker fiber revenue per user.
- Management expects mobility and broadband service revenue growth to approach 3% in Q3 and reach about 4% in Q4.
- SpaceX’s roughly $8 billion spectrum deal adds long-term competitive risk, though an 8.6x forward P/E already prices in plenty of skepticism.
- The October 26 Q3 report will show whether service revenue acceleration and postpaid phone gains are holding up.
Telecom stocks rarely trade on a rival’s fiber metrics. This week, Verizon (VZ) did.
Shares fell 2.2% to $44 on October 21 after AT&T (T) slid on weaker fiber revenue per user. Investors read that as a warning for the sector ahead of Verizon’s own report on October 26.
The timing is awkward. Verizon has spent 2026 building one of the better turnaround stories in telecom, and the stock still shows a 14.7% total return this year.
Then SpaceX (SPCX) bought its way into wireless spectrum, and the debate shifted from execution to competition.
The turnaround numbers so far
Q2 delivered the strongest evidence yet that the strategy is working:
- Mobility and broadband service revenue grew 2.8%, even as total revenue dipped 0.7% to $34.3 billion.
- Total postpaid phone net additions reached 184,000, and broadband added 348,000 customers.
- Adjusted EPS rose 6.6% to $1.30, while free cash flow jumped 24% to $6.4 billion.
Management raised full-year guidance for the second straight quarter. CEO Dan Schulman described the results as evidence of a “structural inflection point” across the business.
Cash generation is what pays the dividend.
That cash funds a $0.71 quarterly dividend plus $3.5 billion of buybacks through the first half.
SpaceX changes the long-term math
In early October, SpaceX agreed to buy up to 14 MHz of paired 800 MHz spectrum from Grain Management, reportedly valued near $8 billion, to support Starlink Mobile. Verizon, AT&T and T-Mobile US (TMUS) all fell on the news.
Verizon already holds low-band spectrum in the 700 MHz and 850 MHz bands, so the asset gap is narrower than the headlines suggested. The SpaceX deal also still needs FCC approval.
The bigger question is pricing. A satellite rival does not need to match Verizon’s network to pressure retention at the low end of the market.
Have investors treated the three carriers differently this year?
The SpaceX headline hit all three. Still, Verizon’s improving subscriber trends give it more cushion than AT&T heading into earnings.
TIKR tracks 25 analysts on Verizon. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Verizon, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Verizon’s Analyst Ratings
Cheap stock, heavy balance sheet
Verizon trades at 8.6x forward earnings with a 6.6% dividend yield and a 71.9% payout ratio. The $51 average analyst target sits about 18% above the current price.
Leverage remains the constraint. Net debt totals $191.3 billion, or 3.35x EBITDA, although unsecured debt fell to $136.5 billion in Q2 from $142.5 billion in Q1.
That deleveraging trend matters more than any single quarter.
Each turn of leverage Verizon removes frees more cash for buybacks or dividend growth.
My take: Verizon looks like a reasonable income holding with improving fundamentals, and 8.6x earnings already prices in plenty of skepticism. The SpaceX threat is real but slow-moving, since it needs regulatory approval and a device ecosystem. My bigger near-term worry is whether the 3% service revenue target holds after AT&T’s soft quarter.
On October 26, watch service revenue growth against that 3% target, postpaid phone net adds, and whether free cash flow guidance of 9% to 10% growth stays intact. Consensus expects about $34.9 billion of revenue and $1.28 of adjusted EPS.
So what is Verizon stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Verizon could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
