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Verizon Q2 Preview: EPS Beat in Store?

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The Zacks Wireless National Industry has been a bright spot in an otherwise dim market, increasing nearly 8% year-to-date and crushing the S&P 500’s performance.

One company residing in the industry, Verizon Communications VZ, is slated to release quarterly results this Friday before the opening bell. Verizon offers communication services in the form of local phone service, long-distance, wireless, and data services.

In addition, the company is a Zacks Rank #3 (Hold) with an overall VGM Score of an A.

Let’s take a look at how the communications giant shapes up heading into Friday.

Share Performance & Valuation

Year-to-date, Verizon shares have provided investors with a much-needed layer of valuable defense, declining a marginal 1.6% but underperforming its Zacks Industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Over the last year, the story remains the same - Verizon shares have decreased by 7.5%, underperforming its Zacks Industry by a small margin.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Verizon sports very enticing valuation metrics; its 9.3X forward earnings multiple is well below its five-year median of 11.7X and nowhere near highs of 14.2X in 2018. In addition, shares trade at an attractive 23% discount relative to its Zacks Industry.

VZ has a Style Score of a B for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Growth Estimates

For the quarter to be reported, analysts have been overwhelmingly bearish – six of the seven estimate revisions from analysts have been downward.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The Zacks Consensus EPS Estimate resides at $1.34, notching a marginal 2.2% decrease in quarterly earnings year-over-year.

Looking at top-line projections, VZ is forecasted to generate $33.8 billion in quarterly revenue, penciling in a minuscule 0.03% uptick from the year-ago quarter.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Performance & Share Reactions

Verizon has impressively recorded eight bottom-line beats over its previous ten quarters. However, in its latest quarterly release, the company reported earnings in-line with the $1.35 Zacks Consensus EPS Estimate.

Top-line results have primarily come in above expectations as well, with the company exceeding quarterly revenue estimates in seven of its previous ten quarters.

In addition, the market has had mixed reactions to bottom-line beats; shares have moved upwards three times over its last six EPS beats.

Bottom Line

Verizon shares have been one of the safer places for investors to park their cash in 2022, decreasing a marginal 1.6% in value. Compared to the valuation slashes we’ve seen across other industries, it’s a major positive.

Earnings are forecasted to decrease marginally. However, the company has rock-solid valuation levels, and recent earnings performance has been stellar.


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