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Verizon Communications (VZ) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Verizon Communications (VZ) closed at $60.60, marking a +0.46% move from the previous day. This change lagged the S&P 500's 0.52% gain on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq gained 1.21%.

Heading into today, shares of the largest U.S. cellphone carrier had gained 2.62% over the past month, outpacing the Computer and Technology sector's gain of 0.89% and the S&P 500's gain of 0.49% in that time.

Wall Street will be looking for positivity from VZ as it approaches its next earnings report date. In that report, analysts expect VZ to post earnings of $1.22 per share. This would mark a year-over-year decline of 2.4%. Meanwhile, our latest consensus estimate is calling for revenue of $31.66 billion, down 3.76% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.78 per share and revenue of $127.96 billion. These totals would mark changes of -0.62% and -2.96%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for VZ. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. VZ currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that VZ has a Forward P/E ratio of 12.62 right now. This valuation marks a discount compared to its industry's average Forward P/E of 23.86.

Investors should also note that VZ has a PEG ratio of 3.7 right now. 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. Wireless National stocks are, on average, holding a PEG ratio of 4.24 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 114, which puts it in the top 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

To follow VZ in the coming trading sessions, be sure to utilize Zacks.com.


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