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Verizon Communications (VZ) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Verizon Communications (VZ) closed the most recent trading day at $59.50, moving -0.77% from the previous trading session. This move lagged the S&P 500's daily loss of 0.31%. Elsewhere, the Dow lost 0.52%, while the tech-heavy Nasdaq lost 0.28%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had gained 6.5% over the past month. This has outpaced the Computer and Technology sector's gain of 2.54% and the S&P 500's gain of 2.92% in that time.

Investors will be hoping for strength from VZ as it approaches its next earnings release. On that day, VZ is projected to report earnings of $1.24 per share, which would represent year-over-year growth of 1.5%. Meanwhile, our latest consensus estimate is calling for revenue of $32.73 billion, up 0.38% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.81 per share and revenue of $131.36 billion, which would represent changes of +2.04% and +0.38%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for VZ. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% higher. VZ is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, VZ is holding a Forward P/E ratio of 12.48. This represents a discount compared to its industry's average Forward P/E of 18.36.

It is also worth noting that VZ currently has a PEG ratio of 2.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless National was holding an average PEG ratio of 2.39 at yesterday's closing price.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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