Verizon (VZ)
Communication Services · $191B market cap · SEC CIK 0000732712
ahead of 53% of the S&P 500 · #7 of 19 in Communication Services
Next reports on Jan 28, 2027, after the close, with analysts expecting $1.19 in earnings per share.
52-week range $38.68 to $51.68. 10% below its 52-week high and 20% above its low.
The case for VZ
- Cheap for its growth: 11.6× earnings, where 1% a year of growth plus a 7.1% dividend would justify about 20×.
- Pays a 7.1% dividend while you wait.
- Return on equity of 16%.
- Gross margin of 60% absorbs cost shocks.
- Moves less than the market (beta 0.26).
The case against
- Earnings per share fell 16.4%.
- Current liabilities exceed current assets (ratio 0.63).
- Long-term debt of $140B against $19.0B of cash.
- Revenue grew only 1.4%, roughly the pace of inflation.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Communication Services companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 68 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 23 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 67 |
| Momentumhow the price has behaved lately | 56 |
| Stabilityhow violently it moves, what it owes and what it pays you | 77 |
- Capital spending is missing from its filings, so free cash flow cannot be worked out. Operating cash flow stands in for the cash test, against a stricter bar.
- Each factor except momentum is half fixed thresholds, half rank among the 19 Communication Services companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +1.4% |
|---|---|
| Over 5 years | +1.5% a year |
| FY2025 revenue | $138B (+3%) |
Free cash flow
Is it generating real cash? Can't tell: no capital spending in its filings
| FY2025 operating cash flow | $37.1B |
|---|---|
| Of profit, before capital spending | 216% |
Its filings do not give capital spending, so free cash flow cannot be worked out. Operating cash flow, which is before that spending, is shown instead, and the score judges it against a stricter bar.
Profit margins
Is profitability improving? No, slipping
| Gross margin | 60% |
|---|---|
| Operating margin | 21% |
| Net margin, FY24 → FY25 → now | 13.0% → 12.4% → 11.8% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $19.0B |
|---|---|
| Long-term debt | $140B |
| Net debt | $120B |
| Years to repay | 3.8 yrs |
Valuation
Is the stock price reasonable? Yes, it looks cheap
| P/E | 11.6× |
|---|---|
| Fair P/E for its growth | 20× |
| P/FCF | n/a |
| Forward P/E | 8.5× |
| EV / EBITDA | 7.2× |
At 11.6× earnings it trades well below the 20× that 1% a year of growth plus a 7.1% dividend would justify.
The financials, five years deep
Pulled from Verizon's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $138B | $135B | $134B | $137B | $134B |
| Change on the year | +3% | +1% | −2% | +2% | — |
| Profit margins | |||||
| Operating margin | 21.2% | 21.3% | 17.1% | 22.3% | 24.3% |
| Net margin | 12.4% | 13.0% | 8.7% | 15.5% | 16.5% |
| Debt vs. cash | |||||
| Cash | $19.0B | $4.2B | $2.1B | $2.6B | $2.9B |
| Long-term debt | $140B | $121B | $138B | $141B | $143B |
| Net cash (debt) | −$120B | −$117B | −$136B | −$138B | −$141B |
What Verizon says it does
Verizon Communications Inc. (the Company) is a holding company that, acting through its subsidiaries (together with the Company, collectively, Verizon), is one of the world’s leading providers of communications, technology, information and streaming products and services to consumers, businesses and government entities. With a presence around the world, we offer data, video and voice services and solutions on our networks and platforms that are designed to meet customers’ demand for mobility, reliable network connectivity and security. We have two reportable segments that we operate and manage as strategic business units - Verizon Consumer Group (Consumer) and Verizon Business Group (Business). Verizon Consumer Group Our Consumer segment provides consumer-focused wireless and wireline communications services and products. Our wireless services are provided across one of the most extensive wireless networks in the United States (U.S.)…
Risk factors VZ lists in its 10-K
- We face significant competition that may negatively affect our operating results
- Adverse conditions in the U.S. and international economies, changes to international trade and tariff policies and related economic and geopolitical factors could impact our results of operations and financial condition
- Cyberattacks impacting our networks or systems could have an adverse effect on our business
- Our long-term success depends on our ability to implement business transformation initiatives and achieve their anticipated benefits
- System failures and disruptions to our networks and operations could prevent us from providing reliable service to customers and adversely affect our business
- We depend on key suppliers and vendors to provide services and equipment that we need to operate our business
- A significant portion of our workforce is represented by labor unions, and we could incur additional costs or experience work stoppages as a result of the renegotiation of our labor contracts
- Damage to our reputation or brands could adversely affect our business
- Changes in the regulatory framework under which we operate could adversely affect our business prospects or results of operations
- Regulation of broadband internet access services
- Conflicting federal, state and international regulations
- Our business may be impacted by changes in tax laws and regulations, or their interpretations, and challenges to our tax positions
- We are subject to a substantial amount of litigation, which could require us to pay significant damages or settlements
- Allegations related to lead sheathed copper cables in our copper network infrastructure could expose us to regulatory scrutiny, litigation, penalties, removal and compliance costs, operational impact or reputational damage
- Verizon has a significant amount of debt, which could increase further if we incur additional debt in the future and do not retire existing debt
- Adverse changes in the financial markets and other factors could increase our borrowing costs and reduce the availability of financing
- Increases in costs for pension benefits and active and retiree healthcare benefits may reduce our profitability and increase our funding commitments
- There can be no assurance that our current or future share repurchase programs will be fully consummated or that we will continue to increase our dividend
- We are subject to risks associated with mergers, acquisitions, divestitures and other strategic transactions