Now trading at a price of $38.04, Verizon Communications has moved -1.4% so far today.
Over the last year, Verizon Communications logged a 4.0% change, with its stock price reaching a high of $42.58 and a low of $30.14. Over the same period, the stock underperformed the S&P 500 index by -11.0%. As of April 2023, the company's 50-day average price was $34.19. 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 110,500 full time employees. Verizon Communications has offered a 6.8% dividend yield over the last 12 months.
Overview of the Company's Finances:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $130,863 | $131,868 | $128,292 | $133,613 | $136,835 | $134,095 |
| Revenue Growth | n/a | 0.77% | -2.71% | 4.15% | 2.41% | -2.0% |
| Gross Margins | 17% | 23% | 22% | 24% | 22% | 22% |
| Operating Margins | 17% | 23% | 22% | 24% | 22% | 22% |
| Net Margins | 12% | 15% | 14% | 17% | 16% | 16% |
| Net Income (MM) | $16,039 | $19,788 | $18,348 | $22,618 | $21,748 | $21,366 |
| Net Interest Expense (MM) | $4,833 | $4,730 | $4,247 | $3,485 | $3,613 | $5,030 |
| Depreciation & Amort. (MM) | $17,403 | $16,682 | $16,720 | $16,206 | $17,099 | $17,326 |
| Earnings Per Share | $3.76 | $4.65 | $4.3 | $5.32 | $5.06 | $4.96 |
| EPS Growth | n/a | 23.67% | -7.53% | 23.72% | -4.89% | -1.98% |
| Diluted Shares (MM) | 4,132 | 4,140 | 4,142 | 4,150 | 4,204 | 4,236 |
| Free Cash Flow (MM) | $17,681 | $17,807 | $23,576 | $19,253 | $14,054 | $16,300 |
| Capital Expenditures (MM) | $16,658 | $17,939 | $18,192 | $20,286 | $23,087 | $21,440 |
| Current Ratio | 0.91 | 0.84 | 1.38 | 0.78 | 0.75 | 0.68 |
| Long Term Debt (MM) | $105,873 | $100,712 | $123,173 | $143,425 | $140,676 | $134,441 |
| Net Debt / EBITDA | 2.78 | 2.31 | 2.46 | 3.05 | 3.12 | 3.07 |
Verizon Communications has average net margins with a stable trend, irregular cash flows, and significant leverage. We also note that the company benefits from weak revenue growth and increasing reinvestment in the business and positive EPS growth. However, the firm has slimmer gross margins than its peers.
Verizon Communications's Earnings and Assets May Be Undervalued:
Verizon Communications has a trailing twelve month P/E ratio of 6.9, compared to an average of 23.78 for the Telecommunications sector. Based on its EPS guidance of $4.63, the company has a forward P/E ratio of 7.4. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 4.7%. On this basis, the company's PEG ratio is 1.46, which shows that it is fairly priced. Additionally, the market is possibly undervaluing Verizon Communications in terms of its equity because its P/B ratio is 1.64 whereas the sector average is 3.46.
Verizon Communications Has an Average Rating of Hold:
The 22 analysts following Verizon Communications have set target prices ranging from $31.0 to $48.0 per share, for an average of $39.26 with a hold rating. As of April 2023, the company is trading -12.9% 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 $13,375,816,272.
