What Should Investors Know About the future of Verizon Communications Inc’s (VZ) Business?
Verizon Communications Inc (NYSE:VZ) is predicted to shrink its earnings per share by a relatively small -3.09% over the next three years. With the recent EPS being $3.903, expected contraction will drag down the upcoming EPS to $3.782. I am going to look at the latest data on VZ to assess whether this adverse expected growth is reasonable. View our latest analysis for Verizon Communications
How is Verizon Communications going to perform in the future?
The bad news for investors of VZ is that a drop in earnings is on the cards. This is based on 25 analysts who estimate earnings dropping to $3.782 from previous levels of around $3.903. This would be a drop of -3.09%, so it will be an interesting ride for any existing shareholders over the next couple of years. In the same period we should see the revenue increase from $123,639M to $127,891M and net income is predicted to decline from $15,927M to $15,435M in the next couple of years. Furthermore, margins look rather unappealing at the current levels of revenue and earnings.
Basis for the contraction
The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is relatively reasonable or whether the negative outlook is too harsh. VZ’s earnings growth is expected to go downhill as analysts expect the double-digit earnings growth in the previous couple of years of 19.60% to get worse over time. As a well-established company, VZ could be exhibiting signs of potential market share loss or obsolete products to larger negative growth over time.
Next Steps:
For VZ, there are three important factors you should look at:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is VZ worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether VZ is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of VZ? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
