Now trading at a price of $33.06, Verizon Communications has moved -0.8% so far today.
Verizon Communications returned losses of -23.0% last year, with its stock price reaching a high of $46.05 and a low of $31.25. Over the same period, the stock underperformed the S&P 500 index by -33.0%. As of April 2023, the company's 50-day average price was $35.16. Verizon Communications Inc., through its subsidiaries, provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. Based in New York, NY, the large-cap Telecommunications company has 117,100 full time employees. Verizon Communications has offered a 7.8% dividend yield over the last 12 months.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2020-02-21 | 2021-02-25 | 2022-02-11 | 2023-02-10 | |
|---|---|---|---|---|
| Revenue (MM) | $131,868 | $128,292 | $133,613 | $136,835 |
| Gross Margins | 58.5% | 60.1% | 57.9% | 56.8% |
| Operating Margins | 23.2% | 22.4% | 24.3% | 22.3% |
| Net Margins | 14.61% | 13.88% | 16.51% | 15.53% |
| Net Income (MM) | $19,265 | $17,801 | $22,065 | $21,256 |
| Net Interest Expense (MM) | -$4,730 | -$4,247 | -$3,485 | -$3,613 |
| Depreciation & Amort. (MM) | -$16,682 | -$16,720 | -$16,206 | -$17,099 |
| Earnings Per Share | $4.65 | $4.3 | $5.29 | $5.0 |
| EPS Growth | n/a | -7.53% | 23.02% | -5.48% |
| Diluted Shares (MM) | 4,140 | 4,142 | 4,169 | 4,204 |
| Free Cash Flow (MM) | $54,583 | $63,856 | $107,421 | $63,881 |
| Capital Expenditures (MM) | -$18,837 | -$22,088 | -$67,882 | -$26,740 |
| Net Current Assets (MM) | -$191,419 | -$192,615 | -$246,668 | -$249,360 |
| Current Ratio | 0.84 | 1.38 | 0.78 | 0.75 |
| Long Term Debt (MM) | $100,712 | $123,173 | $143,425 | $140,676 |
| Net Debt / EBITDA | 2.89 | 3.22 | 4.23 | 4.18 |
Verizon Communications has stable revenues and increasing reinvestment in the business and strong margins with a stable trend. Additionally, the company's financial statements display positive EPS growth and consistent free cash flow. However, the firm suffers from slimmer gross margins than its peers and a highly leveraged balance sheet.
The Market May Be Undervaluing Verizon Communications's Assets and Equity:
Verizon Communications has a trailing twelve month P/E ratio of 7.0, compared to an average of 18.85 for the Telecommunications sector. Based on its EPS guidance of $4.7, the company has a forward P/E ratio of 7.5. The 0.2% compound average growth rate of Verizon Communications's historical and projected earnings per share yields a PEG ratio of 32.84. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing Verizon Communications in terms of its equity because its P/B ratio is 1.46 while the sector average is 3.12. The company's shares are currently trading -33.2% below their Graham number.
Verizon Communications Has an Average Rating of Hold:
The 23 analysts following Verizon Communications have set target prices ranging from $30.0 to $64.0 per share, for an average of $40.13 with a hold rating. As of April 2023, the company is trading -12.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Verizon Communications has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 63.9% of the company's shares, and the insider ownership rate stands at 0.03%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $11,531,870,464.
