Now trading at a price of $43.88, Verizon Communications has moved -1.4% so far today.
Verizon Communications returned gains of 44.3% last year, with its stock price reaching a high of $45.36 and a low of $30.14. Over the same period, the stock outperformed the S&P 500 index by 12.0%. More recently, the company's 50-day average price was $42.17. Verizon Communications Inc., through its subsidiaries, engages in the provision of 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 103,900 full time employees. Verizon Communications has offered a 6.0% dividend yield over the last 12 months.
The Firm Has a Declining EPS Growth Trend:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $130,863 | $131,868 | $128,292 | $133,613 | $136,835 | $133,974 |
| Operating Margins | 17% | 23% | 22% | 24% | 22% | 17% |
| Net Margins | 12% | 15% | 14% | 17% | 16% | 9% |
| Net Income (M) | $15,528 | $19,265 | $17,801 | $22,065 | $21,256 | $11,614 |
| Net Interest Expense (M) | $4,833 | $4,730 | $4,247 | $3,485 | $3,613 | $5,524 |
| Depreciation & Amort. (M) | $17,403 | $16,682 | $16,720 | $16,206 | $17,099 | $17,624 |
| Diluted Shares (M) | 4,132 | 4,140 | 4,142 | 4,150 | 4,204 | 4,215 |
| Earnings Per Share | $3.76 | $4.65 | $4.3 | $5.32 | $5.06 | $2.75 |
| EPS Growth | n/a | 23.67% | -7.53% | 23.72% | -4.89% | -45.65% |
| Avg. Price | $40.57 | $47.21 | $48.98 | $48.98 | $47.48 | $44.0 |
| P/E Ratio | 10.79 | 10.13 | 11.39 | 9.21 | 9.38 | 15.94 |
| Free Cash Flow (M) | $17,681 | $17,807 | $23,576 | $19,253 | $14,054 | $18,708 |
| CAPEX (M) | $16,658 | $17,939 | $18,192 | $20,286 | $23,087 | $18,767 |
| EV / EBITDA | 6.95 | 6.46 | 6.67 | 7.05 | 7.09 | 7.91 |
| Total Debt (M) | $113,063 | $111,489 | $123,173 | $143,425 | $140,676 | $137,701 |
| Net Debt / EBITDA | 2.78 | 2.31 | 2.22 | 2.89 | 2.9 | 3.35 |
| Current Ratio | 0.91 | 0.84 | 1.38 | 0.78 | 0.75 | 0.69 |
Verizon Communications has slight revenue growth and a flat capital expenditure trend, decent operating margins with a stable trend, and significant leverage levels. We also note that the company has generally positive cash flows working in its favor. However, the firm suffers from declining EPS growth and not enough current assets to cover current liabilities because its current ratio is 0.69.
an Increase in Expected Earnings Improves Its Value Outlook but Priced Beyond Its Margin of Safety:
Verizon Communications has a trailing twelve month P/E ratio of 15.9, compared to an average of 20.57 for the Telecommunications sector. Based on its EPS guidance of $4.69, the company has a forward P/E ratio of 9.0. The 3.2% compound average growth rate of Verizon Communications's historical and projected earnings per share yields a PEG ratio of 4.94. 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 1.92 while the sector average is 2.36. The company's shares are currently trading 18.3% below their Graham number.
There's an Analyst Consensus of Some Upside Potential for Verizon Communications:
The 23 analysts following Verizon Communications have set target prices ranging from $37.0 to $55.0 per share, for an average of $46.55 with a buy rating. The company is trading -5.7% 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 64.2% of the company's shares, and the insider ownership rate stands at 0.04%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $15,537,059,331.
