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New York-based Verizon Communications Inc. (VZ) is involved in the global distribution of information, communications, and technology products to consumers, businesses, and governmental entities worldwide. With a market cap of $166.2 billion, the company is renowned for its top-notch network, offering reliable coverage and fast data connections.
Companies valued at $10 billion or more are generally considered “large-cap stocks,” and Verizon fits this bill perfectly. Its valuation above this mark is not surprising, considering it is one of the three dominant mobile phone carriers in the U.S.
Verizon is facing choppy waters, with VZ stock dipping over 8% from its 52-week highs. Verizon stock's gain of 0.18% over the past three months is better than the 7.43% dip in the S&P 500 Telecom Sector SPDR's (XTL) over the same time frame.
Longer term, over the past 10 years, shares of VZ have declined 20.98%, significantly underperforming the broader XTL, which gained 25.78%. However, VZ is up 5.54% on a YTD basis compared to XTL's 10.26% losses. Moreover, shares of VZ have gained 5.91% for the past 52 weeks, outperforming XTL's 0.68% gain over the same period.
To confirm the mixed price trend, VZ has been trading below its 50-day and 100-day moving averages since April. However, VZ is still has been trading above its 200-day moving average, as it has since mid-November, prior to which it was trading above all.
Inflation affected diverse sectors, and even the telecom industry felt the heat. WhistleOut's survey reveals that Americans shell out $160 a month for major carrier plans. Verizon's recent price hike in March adds to the strain, potentially denting demand. The already slowing smartphone usage and upgrades hint at challenges for Verizon, suggesting a rocky road ahead in the telecom realm amid ongoing inflationary pressures.
Verizon's stocks stumbled last month after disappointing Q1 earnings results, marked by a revenue miss and a loss of postpaid net subscribers. Adding to the woes, the Federal Communications Commission (FCC) slapped Verizon with a hefty $47 million fine, part of nearly $200 million in penalties against wireless carriers for unlawfully sharing customer location data.
Despite this, the surge in fixed home Internet, known as "Cord Cutting 2.0," benefits Verizon as it expands its 5G home internet services, attracting more consumers and eyeing new market opportunities.
Although Verizon's stock has been on a rollercoaster ride this year, analysts are optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 20 analysts covering it, and the mean price target of $44.38 is a premium of 11.5% to current levels.
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