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Verizon Raises the Bar With the Acquisition of BlueJeans

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On May 15, Verizon Communications Inc. VZ officially completed the acquisition of San Jose, CA-based video conferencing company — BlueJeans Network. The New York-based telecom and media giant’s shares inched up 1.9% in yesterday’s trading, closing at $55.72.

Through this deal, Verizon Business has welcomed 390 new employees. BlueJeans’ founders and key management team have joined Verizon as they work together to lead growth and innovation of the business. BlueJeans’ products complement Verizon’s mobile-first business solutions like One Talk and will be integrated into the wireless carrier’s 5G product roadmap.

Founded in 2009, BlueJeans has 15,000 business clients and is one of Zoom Video Communications’ ZM rivals. It serves a variety of business segments that range from small organizations to some of the world’s largest multinational brands. Also, BlueJeans enables cloud-based meetings and interactive events that are scalable and secure. The move underscores Verizon’s focus on keeping businesses connected, especially during the COVID-19 pandemic.

The combination of BlueJeans with Verizon’s innovations in 4G, 5G and Mobile Edge Computing will unlock the synergies to serve customers. The buyout expands Verizon’s unified communications portfolio and bolsters its business group, as the wireless carrier continues to roll out 5G networks. Verizon was looking at BlueJeans for almost a year. Its distribution will enable BlueJeans to better compete with Zoom and others.

Meanwhile, customers will benefit from a BlueJeans enterprise-grade video experience on Verizon’s high-performance global networks. The platform will be integrated into Verizon’s 5G product roadmap, providing real-time engagement solutions for high-growth areas such as telemedicine, distance learning and field service work.

Driven by investment in 5G and Fiber strategies, Verizon’s shares have lost 6.3% compared with 9.5% decline of the industry in the past six months.

The company topped earnings estimates thrice in the last four quarters and missed the same in the remaining quarter. It has a trailing four-quarter positive earnings surprise of 1.2%, on average. The stock is currently trading with a forward P/E of 11.5X.

Verizon has a dividend yield of 4.5% compared with 4.9% of the industry. The company has a long-term earnings growth expectation of 3.1% compared with the industry’s 8.8%.

Verizon currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Turtle Beach Corporation HEAR, sporting a Zacks Rank #1 (Strong Buy) and Plantronics, Inc. PLT, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Turtle Beach has a trailing four-quarter positive earnings surprise of 46.4%, on average.

Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.

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Verizon Communications Inc. (VZ) : Free Stock Analysis Report
Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
Plantronics, Inc. (PLT) : Free Stock Analysis Report
Zoom Video Communications, Inc. (ZM) : Free Stock Analysis Report
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