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

Zacks Equity Research
·3 min read

Verizon Communications (VZ) closed the most recent trading day at $59.98, moving +0.12% from the previous trading session. The stock lagged the S&P 500's daily gain of 0.58%. Meanwhile, the Dow gained 0.49%, and the Nasdaq, a tech-heavy index, added 0.84%.

Heading into today, shares of the largest U.S. cellphone carrier had lost 0.68% over the past month, lagging the Computer and Technology sector's gain of 5.17% and the S&P 500's gain of 2.12% in that time.

VZ will be looking to display strength as it nears its next earnings release. On that day, VZ is projected to report earnings of $1.16 per share, which would represent year-over-year growth of 2.65%. Meanwhile, our latest consensus estimate is calling for revenue of $34.46 billion, down 0.91% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.85 per share and revenue of $128.06 billion. These totals would mark changes of +0.83% and -2.88%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for VZ. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.01% higher. 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 12.35 right now. For comparison, its industry has an average Forward P/E of 15.97, which means VZ is trading at a discount to the group.

We can also see that VZ currently has a PEG ratio of 3.55. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Wireless National industry currently had an average PEG ratio of 2.94 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 96, putting it in the top 38% 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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