With a market cap of $166.2 billion, Verizon Communications Inc. (VZ) is a global leader in communications, technology, and entertainment services, offering wireless, broadband, and wireline solutions. It operates through two main segments: Verizon Consumer Group, which offers wireless and Fios services, and Verizon Business Group, which provides communication and networking solutions for businesses and government entities. Verizon has expanded its reach through strategic mergers and acquisitions, including its partnerships with MCI Corporation and Amazon Web Services.
Shares of the largest U.S. cellphone carrier have underperformed the broader market over the past 52 weeks. VZ has declined 7.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 23.3%. On a YTD basis, shares of VZ are down 1.3%, compared to SPX’s 3.2% gain.
Focusing more closely, the New York-based company has also lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 31.1% gain over the past 52 weeks and a 5.3% YTD return.
Verizon's shares rose marginally on Jan. 24 as the company reported stronger-than-expected Q4 2024 results, with adjusted EPS of $1.10 and revenue of $35.7 billion. The company also recorded impressive postpaid net additions of 1.41 million and broadband net additions of 408,000, including 373,000 in fixed wireless. Additionally, Verizon's net income of $5.1 billion showed a significant turnaround, rising from a loss in the prior-year quarter to a profit, bolstered by a pre-tax gain from special items. Positive guidance for 2025, including expected wireless service revenue growth and adjusted EBITDA increase, further helped boost investor confidence.
For the current fiscal year, ending in December 2025, analysts expect VZ’s EPS to grow 2.2% year-over-year to $4.69. The company's earnings surprise history is promising. It topped the consensus estimates in all of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on nine “Strong Buy” ratings, two “Moderate Buys,” and 14 “Holds.”
This configuration is more bullish than three months ago, with seven “Strong Buy” ratings on the stock.
On Jan. 28, Evercore ISI raised its price target on VZ to $44 while maintaining an "In Line" rating due to the company's strong subscriber and financial momentum heading into 2025. While the firm remains on the sidelines, it expressed a positive bias, citing Verizon's solid execution and undemanding valuation.
As of writing, VZ is trading below the mean price target of $46.49. The Street-high price target of $55, implies a potential upside of 39.3% from the current price levels.
