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Verizon Communications (VZ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Verizon Communications (VZ) closed at $59.71 in the latest trading session, marking a +1.79% move from the prior day. This move outpaced the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had gained 5.33% over the past month. This has outpaced the Computer and Technology sector's gain of 2.03% and the S&P 500's gain of 2.25% in that time.

Wall Street will be looking for positivity from VZ as it approaches its next earnings report date. The company is expected to report EPS of $1.24, up 1.64% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.73 billion, up 0.38% from the year-ago period.

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 +2.12% 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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 0.07% higher within the past month. VZ is currently a Zacks Rank #3 (Hold).

Digging into valuation, VZ currently has a Forward P/E ratio of 12.2. This valuation marks a discount compared to its industry's average Forward P/E of 18.06.

We can also see that VZ currently has a PEG ratio of 2.81. 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 2.32 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 103, putting it in the top 41% 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.

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


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