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Verizon Communications (VZ) Gains As Market Dips: What You Should Know

Zacks Equity Research
Waddell & Reed (WDR) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Verizon Communications (VZ) closed at $60.08 in the latest trading session, marking a +0.54% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.08%. Elsewhere, the Dow gained 0.06%, while the tech-heavy Nasdaq lost 0.07%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had gained 6.43% over the past month. This has outpaced the Computer and Technology sector's gain of 3.22% and the S&P 500's gain of 0.52% in that time.

Wall Street will be looking for positivity from VZ as it approaches its next earnings report date. On that day, VZ is projected to report earnings of $1.17 per share, which would represent no growth from the year-ago period. Our most recent consensus estimate is calling for quarterly revenue of $32.26 billion, up 1.55% from the year-ago period.

VZ's full-year Zacks Consensus Estimates are calling for earnings of $4.66 per share and revenue of $132.29 billion. These results would represent year-over-year changes of -1.06% and +1.09%, respectively.

Investors should also note any recent changes to analyst estimates for VZ. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 0.05% higher. VZ is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, VZ is currently trading at a Forward P/E ratio of 12.82. This valuation marks a discount compared to its industry's average Forward P/E of 28.66.

Investors should also note that VZ has a PEG ratio of 3.11 right now. 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. VZ's industry had an average PEG ratio of 3.01 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 32% 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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