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How Does Verizon’s Valuation Look?

Andrew Smith
How Does Verizon’s Valuation Look?

What to Expect from Verizon's Q4 Earnings(Continued from Prior Part)## Verizon’s scaleAs of January 4, Verizon (VZ) was the largest US wireless carrier with a market capitalization of $232.9 billion. Meanwhile, the market caps of AT&T (T), T-Mobile (TMUS), and Sprint (S) were $220.8 billion, $57.3 billion, and $25.3 billion, respectively. Market capitalization represents a company’s market value, which is its shares outstanding multiplied by its stock price.## Forward EV-to-EBITDA valuationOn January 4, Verizon had a trailing-12-month EV-to-EBITDA (enterprise value-to-earnings before interest, tax, depreciation, and amortization) multiple of ~7.38x. In comparison, T-Mobile, AT&T, and Sprint had trailing-12-month EV-to-EBITDA multiples of ~7.59x, ~7.44x, and ~4.72x, respectively. Verizon expects its EV-to-EBITDA in 2019 to be ~7.11x, while in 2020, the multiple is expected to be ~7.09x.## Forward PE valuationVerizon is currently trading at a PE multiple of ~15.04x, which is lower than T-Mobile at ~21.12x, and lower than AT&T at ~15.12x. Verizon’s forward PE ratio for fiscal 2019 is ~11.95x and is estimated at ~11.88x in fiscal 2020. In comparison, T-Mobile and AT&T have forward PE ratios of ~16.84x and ~8.49x, respectively, in fiscal 2019.Continue to Next PartBrowse this series on Market Realist: * Part 1 - What Do Analysts Expect from Verizon’s Q4 Earnings? * Part 2 - What Analysts Expect from Verizon’s Q4 Revenue * Part 3 - How Much EBITDA Growth Will Verizon Record in Q4 2018?