VZ
VZVerizon Communications is a leading provider of telecommunications, information technology, and security services, primarily operating in the telephone communications industry.
It is a dominant U.S. wireless carrier, defined by its extensive network reliability and a large, loyal consumer and business subscriber base.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy VZ Today?
Based on a comprehensive review of VZ, the stock presents a classic value versus growth predicament.
Technical & Fundamental Snapshot Technically, VZ is deeply oversold and near its 52-week low, hinting at a potential rebound, but it lacks positive momentum. Fundamentally, it faces challenges including declining revenue, high leverage, and poor operational efficiency (low ROE).
Valuation & Risk Profile The valuation is compelling, with very low P/E ratios suggesting significant undervaluation. Its low beta offers a defensive characteristic. However, these attractive metrics are overshadowed by substantial debt and a lack of clear growth catalysts.
Investment Recommendation For income-focused investors with a long-term horizon, VZ's high dividend yield and defensive nature may be worth the risk, especially at this depressed price level. However, growth investors should avoid it due to the lack of top-line growth and significant financial leverage. The stock is a speculative buy for value hunters betting on a turnaround, not a clear growth opportunity.
*This is not investment advice, for reference only.*
VZ 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month outlook for Verizon (VZ).
12-Month Outlook for Verizon (VZ):
Verizon's stock is expected to remain range-bound as its high dividend yield provides a floor, while significant debt and a lack of growth catalysts limit upside potential. The key positive catalyst is any success in its fixed wireless access (FWA) rollout capturing market share, alongside potential cost-cutting measures to improve margins. Primary risks include intense price competition eroding profitability, high interest expenses on its substantial debt, and persistent subscriber losses in its legacy divisions. Given its depressed valuation, a realistic 12-month price target would be in the $42-$48 range, representing a potential rebound to its historical average valuation as income investors are attracted by the yield.
Wall Street Consensus
Most Wall Street analysts are optimistic about VZ's 12-month outlook, with consensus target around $39.83, indicating expected upside potential.
Bulls vs Bears: VZ Investment Factors
Overall, VZ has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Dividend Yield: Offers nearly 7% dividend yield with a recent dividend hike.
- Leadership Change Promising Strategy: New CEO promises big changes and reiterated 2025 guidance.
- Market Leadership Position: Largest U.S. wireless carrier by subscriber count with 146.1 million connections.
- Positive Stock Momentum: Stock rose after Q3 earnings beat and dividend announcement.
Bearish
- Intensifying Price War: Wireless price war fears growing among Verizon, AT&T, and T-Mobile.
- Weak Long-Term Performance: Stock badly trailed S&P 500 over the past decade.
- Recent Stock Declines: Stock declined in trading sessions despite broader market gains.
- Dividend-Focused Concerns: Criticism against treating common stock purely as a bond substitute.
VZ Technical Analysis
Of course. Here is the technical analysis of VZ's recent price performance:
1. Overall Assessment VZ has demonstrated significant underperformance versus the broader market over the past three months, with its price currently trapped in a pronounced downtrend near the lower end of its 52-week range.
2. Short-term Performance The stock has faced sustained selling pressure, declining over 4% in the last three months and underperforming the market by nearly 8% during that period. This consistent negative momentum, evidenced by the recent one-month drop of over 3%, signals weak investor sentiment and a lack of bullish catalysts in the short term.
3. Current Position VZ's current price sits just above its 52-week low, indicating it is deeply oversold from a technical perspective. While the low beta suggests lower volatility relative to the market, the 17.4% maximum drawdown highlights the severity of the decline, presenting a potential for a technical rebound if market conditions stabilize.
| Period | VZ Return | S&P 500 |
|---|---|---|
| 1m | -2.6% | +1.3% |
| 3m | -0.1% | +5.7% |
| 6m | -6.5% | +10.6% |
| 1y | +4.3% | +16.5% |
| ytd | -1.7% | +1.1% |
VZ Fundamental Analysis
Revenue & Profitability Revenue declined from $34.5B to $33.8B quarter-over-quarter, though profitability metrics remain stable with a net profit margin of approximately 14.6%. The company maintains solid operating profitability with an operating margin near 24%, though top-line contraction warrants monitoring for sustainability.
Financial Health VZ carries significant leverage with a debt-to-equity ratio of 1.62 and total debt to capitalization of 62%, indicating a highly leveraged capital structure. Interest coverage of 4.9 times remains adequate but leaves limited margin for error given the substantial debt burden.
Operational Efficiency Operational efficiency appears challenged with low return metrics, including ROE of 4.7% and asset turnover of just 0.09, reflecting inefficient asset utilization. The negative cash conversion cycle of -21 days is a positive working capital management feature, though overall capital efficiency remains subdued.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Level Analysis
Verizon appears considerably undervalued on several key metrics. Its trailing and forward P/E ratios of approximately 9 are extremely low, indicating a market valuation that prices its earnings at a significant discount. Furthermore, its Price-to-Book ratio of 1.58 and Price-to-Sales ratio of 1.23 are modest, reinforcing the view that the stock is trading below its intrinsic value. The negative PEG ratio suggests market concerns about negative or declining long-term earnings growth, which is likely the primary driver behind the discounted multiples.
Peer Comparison
A direct peer comparison cannot be performed without the explicit industry average data. However, given the metrics presented, Verizon's single-digit P/E and modest P/S ratio are typically characteristic of a value stock within the mature telecommunications sector. The elevated EV/EBITDA ratio of nearly 20 suggests that when accounting for debt, the company's valuation is much richer, which is common for telecom companies with significant infrastructure investments and leverage. This indicates that while the equity may be cheap, the overall enterprise value reflects the capital-intensive nature of the business.
Investment Risk Disclosure
Volatility Risk: Verizon's exceptionally low beta of 0.327 indicates its volatility is significantly less than the broader market, offering a defensive profile against market swings. However, the stock is not immune to downturns, as evidenced by its recent one-year maximum drawdown of -17.4%, which highlights potential downside risk during unfavorable sector or market conditions.
Other Risks: The absence of any notable short interest suggests a strong market consensus on the stock's stability and lack of immediate negative catalysts. Nonetheless, risks persist, including moderate liquidity compared to more actively traded technology stocks and susceptibility to sector-specific pressures such as intense competition and high capital expenditure requirements.
FAQs
Opinion: Neutral-to-Bearish
Reasons: 1. Weak Fundamentals: Revenue decline, high leverage (62% debt-to-capitalization), and low operational efficiency (ROE of 4.7%) signal structural challenges. 2. Technical Downtrend: Stock is near 52-week lows, underperforming the market by 8% over three months with no bullish catalysts. 3. Sector Headwinds: Intensifying price competition and capital-intensive demands pressure long-term growth.
Suitable For: Income-focused investors seeking high dividends (7% yield), but unsuitable for growth-oriented portfolios due to stagnant earnings and leverage risks.
Based on the provided data, Verizon (VZ) stock appears undervalued.
Key Valuation Metrics: - PE Ratio: 9.03, which is very low and indicates the market prices its earnings at a significant discount. - Forward PE: 9.24, reinforcing the view that earnings are cheap relative to the current stock price. - PB Ratio: 1.58, a modest level suggesting the stock is not trading at a large premium to its book value.
Explanation: The primary reason for this undervaluation is the market's pessimistic growth outlook, as reflected in the negative PEG ratio. This is likely due to concerns over the company's high debt load, declining revenue, and low operational efficiency (evidenced by a low ROE and asset turnover). However, its stable, double-digit net profit margin and very low earnings multiples suggest the current stock price does not fully reflect its profitability and could represent a value opportunity for investors willing to accept the risks associated with its leverage and growth challenges.
Of course. As a risk management analyst, here is a structured assessment of the key risks associated with holding Verizon Communications Inc. (VZ) stock.
Based on the provided information, the primary risks are:
1. Financial Risk (High Leverage): Verizon's highly leveraged capital structure, with a debt-to-capitalization ratio of 62%, poses a significant risk to equity holders by amplifying the impact of earnings declines, increasing interest expense, and limiting financial flexibility. 2. Business/Competitive Risk (Top-Line Pressure): The recent quarter-over-quarter revenue decline, combined with intense industry competition and high capital expenditure requirements, risks eroding the company's market share and profitability if it cannot effectively monetize its 5G investments. 3. Market/Price Risk (Persistent Weakness): The stock is in a pronounced technical downtrend, having underperformed the market significantly and trading near its 52-week low, reflecting weak investor sentiment and a lack of near-term catalysts that could lead to further price depreciation. 4. Operational Risk (Inefficiency): Key operational metrics, such as a very low asset turnover ratio of 0.09 and a subdued Return on Equity (ROE) of 4.7%, indicate inefficient use of assets and capital, which could hinder future earnings growth and shareholder returns.
Of course. Here is a forecast for Verizon (VZ) stock performance through 2026 based on its current strategic position and market dynamics.
VZ Stock Forecast through 2026
My forecast anticipates a period of stabilization and moderate recovery driven by Verizon's focus on cash flow and debt reduction, with the high dividend yield providing a floor for the stock price. A base case target range for 2026 is $45-$50, while a bull case could see the stock reach $55-$60 if its Fixed Wireless Access (FWA) and broadband initiatives significantly outperform expectations.
The key growth drivers are: 1) the successful monetization of its robust 5G network through FWA and broadband subscriber growth, 2) a strategic shift towards prioritizing free cash flow to reduce its substantial debt load, and 3) potential margin expansion from cost-cutting and operational efficiencies.
This forecast assumes that interest rates will stabilize or decline, easing pressure on its debt servicing costs, and that competitive intensity in the wireless market does not escalate further. It is crucial to note the high uncertainty of this forecast, as Verizon's performance is highly sensitive to interest rates, competitive dynamics, and its ability to execute its turnaround strategy effectively.