Key Stats for Verizon Communications Stock
- Past week’s performance: +4.23%
- 52-week range: $38 to $50
- Valuation model target price: $60
- Implied upside: 22.5% over 2.9 years
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What Happened?
Shares of Verizon Communications (VZ) have traded mostly sideways in recent weeks, with the stock closing near $49 on February 13.
The muted price action followed Verizon’s Q4 earnings report in late January, where the company reported adjusted EPS of $1.09, modestly above consensus estimates of $1.06. Revenue of about $36.4 billion also came in slightly ahead of expectations.
Despite the earnings beat, the stock reaction remained limited because wireless competition stayed intense, and revenue growth remained modest. Management highlighted continued pressure from promotional activity across the industry, especially from rivals offering aggressive premium plan incentives.
During the past week, investors also digested several corporate updates. Verizon announced leadership changes within its consumer group, and reports indicated ongoing cost actions tied to workforce reductions and severance charges recorded in prior quarters. These moves reinforced management’s focus on efficiency, but they did not materially change near-term growth expectations.
At the same time, broader telecom stocks were mixed after reports showed T-Mobile adding fewer wireless subscribers than expected, which slightly eased competitive concerns but did not spark a strong rerating across the sector.
Overall, Verizon’s recent trading reflects stable fundamentals, steady cash flow, and limited near-term catalysts rather than a shift in the company’s operating outlook.
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Is Verizon Communications Stock Undervalued?
Under valuation model assumptions realized through 2028, the stock is modeled using:
- Revenue growth (CAGR): 2.2%
- Operating margins: 24.2%
- Exit P/E multiple: 8.6x
Based on these inputs, the model estimates a target price of $60, implying 22.5% total upside from the current share price and a 7.3% annualized return over the next 2.9 years.
Business execution remains the key driver behind these assumptions, especially subscriber retention and pricing discipline in a competitive wireless market.
Revenue over the past year rose about 2.5%, reflecting stable wireless service revenue but limited growth across legacy wireline operations. Operating margins held near 21% on a trailing basis, supported by cost controls and moderating capital intensity.
Free cash flow totaled roughly $22 billion over the last twelve months, even as Verizon continued elevated capital spending to support its 5G and fiber networks. That cash flow supported dividends of about $11.5 billion, keeping Verizon’s dividend yield near 5.7%.
Balance sheet leverage remains elevated, with net debt around $163 billion, but management reiterated its focus on gradual deleveraging through cash generation rather than asset sales.
If execution remains steady, Verizon’s valuation appears anchored more by income stability and cash returns than by expectations for meaningful growth, which helps explain why the stock has traded in a narrow range in recent weeks.
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