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

Zacks Equity Research

Verizon Communications (VZ) closed at $55.13 in the latest trading session, marking a +0.8% move from the prior day. This change lagged the S&P 500's 1.54% gain on the day. Elsewhere, the Dow gained 0.85%, while the tech-heavy Nasdaq added 1.87%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had lost 1.95% over the past month. This has lagged the Computer and Technology sector's gain of 3.97% and the S&P 500's gain of 0.57% in that time.

Investors will be hoping for strength from VZ as it approaches its next earnings release, which is expected to be July 24, 2020. In that report, analysts expect VZ to post earnings of $1.22 per share. This would mark a year-over-year decline of 0.81%. Meanwhile, our latest consensus estimate is calling for revenue of $29.83 billion, down 6.97% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.73 per share and revenue of $127.18 billion, which would represent changes of -1.66% and -3.56%, respectively, from the prior year.

Investors should also note any 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.4% lower. VZ is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that VZ has a Forward P/E ratio of 11.55 right now. This valuation marks a discount compared to its industry's average Forward P/E of 24.59.

We can also see that VZ currently has a PEG ratio of 4.08. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Wireless National stocks are, on average, holding a PEG ratio of 2.89 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 38, putting it in the top 15% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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