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

Zacks Equity Research

In the latest trading session, Verizon Communications (VZ) closed at $60.48, marking a +0.27% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.03%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.14%.

Prior to today's trading, shares of the largest U.S. cellphone carrier had lost 1.57% over the past month. This has lagged the Computer and Technology sector's gain of 6.3% and the S&P 500's gain of 3.23% in that time.

Investors will be hoping for strength from VZ as it approaches its next earnings release, which is expected to be January 30, 2020. The company is expected to report EPS of $1.15, up 2.68% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $34.53 billion, up 0.73% from the year-ago period.

Investors should also note any recent changes to analyst estimates for VZ. Recent revisions tend to reflect the latest near-term business trends. 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. 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 0.19% lower. VZ currently has a Zacks Rank of #3 (Hold).

Investors should also note VZ's current valuation metrics, including its Forward P/E ratio of 12.19. Its industry sports an average Forward P/E of 14.75, so we one might conclude that VZ is trading at a discount comparatively.

It is also worth noting that VZ currently has a PEG ratio of 3.79. 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. The Wireless National was holding an average PEG ratio of 3.12 at yesterday's closing price.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 206, which puts it in the bottom 20% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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