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VZ Stock: Buy Or Sell? Here’s the Earnings, Graph Shown On Verizon Stocks


While VZ stock has consistently underperformed the S&P 500 index, the telecommunications giant has traditionally attracted investors with dividend income. However, if 5G wireless services stifle earnings and revenue growth, Verizon’s stock could have much greater appeal.




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Verizon Communications (VZ) is currently trading at a low valuation not seen since 2017. Investors should be cautious of any buying activity amid a bear market and Fed rate hikes.

VZ stock’s third-quarter earnings are due on Friday, October 21. Analysts estimate that Verizon’s EPS will fall 9% to $1.28.

VZ stock is down 29% in 2022. The S&P 500 is down about 24%.

However, Oppenheimer analyst Tim Horan recently upgraded Verizon’s stock to underperforming.

“We anticipate gradual stabilization to its subscriber base growth, although short-term trends are likely to remain volatile; improving network quality; and package success,” he said in a report. fixed wireless access service industry is growing,” he said in a report.

Verizon faces a fierce marketing battle amid the rollout of 5G networks. Add Doa, Apple (AAPL) introduced the new iPhone 14. Wireless service providers responded with new promotion.

At a Goldman Sachs financial conference on September 14, Verizon CEO Hans Vestberg said he expects consumer postpaid net additions to be negative again in the September quarter. He said Verizon could perform better in the fourth quarter.

Verizon may have trouble as wireless competition heats up with AT&T (BILLION) and T-Mobile US (TMUS), analysts say. Instead of chasing subscriber market share, Verizon has focused on average monthly subscription revenue.

VZ stock: Losing market share

Craig Moffett, an analyst at MoffettNathanson, recently downgraded Verizon’s stock to underperforming. He noted that “whether it’s a total phone or a postpaid phone, Verizon has lost market share in every quarter since the second quarter of 2020.”

“Verizon has done its best to avoid being dragged into AT&T’s advertising abyss, but its efforts have had limited success,” added Moffett.

Meanwhile, Warren Buffett’s Berkshire Hathaway (BRKB) unloading The remaining 1.4 million shares of Verizon in the second quarter.

VZ stock’s Q6 earnings missed estimates. The telecom company downgraded its 2022 EPS guidance for Verizon stock.

Verizon said it added only 12,000 postpaid wireless phone subscribers in the second quarter compared with an estimate of 144,000.

During the first period of last year, Verizon added 275,000 postpaid wireless phone customers.

“Verizon’s problem is around brand and marketing image,” said Raymond James analyst Frank Louthan. “For whatever reason the quality of the network is not enough to attract customers. The management has been tough and the guidance implies that they will be back in the battle for subscribers with promotional spend and retention. more legs until the end of 2022.”

Verizon Stock A defensive play?

Telecom stocks has been seen as a defensive game amid fears that a recession could hit the US economy. A component of the Dow, Verizon stock pays a 4.8% dividend.

An overhang on VZ stock concerns the mid-band radio spectrum it bought 5G wireless service. Verizon shares spent $53 billion in a government auction, including incentive payments to satellite operators and clearing costs. The purchase of mid-band spectrum for 5G services will delay the acquisition of VZ shares.

VZ shares in May 2021 sold a 90% stake in its media and advertising business to Apollo Global Management for $5 billion.

In a flash, Verizon in November finally closed its $6.25 billion acquisition of Tracfone from its Mexico headquarters. America Movie (AMX). Tracfone sells prepaid wireless services.

For Verizon stock, one problem is that 5G wireless competition is expected to become increasingly stiff. Cable TV companies are promoting new promotions with strong prices.

T-Mobile US’s acquisition of Sprint created a stronger competitor. Also, AT&T recently agreed its WarnerMedia business merge with Discover (DISCA). As a result, AT&T shrinking is expected to have more money to invest in 5G wireless technology and fiber services.

Verizon Stock: Mid-Range Spectrum Key to 5G Revenue Growth

Now that Verizon has enough 5G mid-band spectrum, building their network will be key. Verizon aims to reach 175 million people by the end of 2022 with mid-band spectrum-based 5G services that offer faster data speeds.

In addition, Verizon plans to use the mid-band 5G to provide fixed broadband service to the house. Cable TV companies currently dominate the residential broadband sector. Telecom says its fixed broadband service will reach 30 million homes by the end of 2023.

Verizon expects 5G business services to gain momentum in 2022. In addition, they are investing in “competitive mobile” sites that offer private 5G business services.

VZ stock: Content trading

New York-based Verizon has partnered with Walt Disney (DIS) in video streaming services. Disney and Verizon in August expanded their streaming partnership to include Hulu and ESPN+. Verizon has also partnered for Apple (AAPL) Music service and with sports leagues.

In December 2020, Verizon added Discover (DISCA) as a video streaming partner.

“We continue to believe that Verizon’s streaming partnerships with Disney, Discovery, NFL as well as gaming partnerships with Apple/Google are driving sales,” said Raymond James analyst Frank Louthan. sell higher unlimited premium plans”.

VZ Stock: New Top Manager

Thanks to low interest rates, Verizon stock has had some good runs since the 2008-2009 global recession. The telecom giant at one point jumped into IBD Charts. It’s a curated list of top stocks that stand out on fundamental and technical indicators.

Verizon has more exposure to the US wireless market than telecom rival AT&T. Verizon receives nearly 85% of adjusted income from its wireless business.

The company has paid off its debt since the purchase Vodafone Groupof the (VOD) 45% stake in $130 billion wireless venture at the beginning of 2014.

Moreover, its senior leadership is new. Hans Vestberg was an executive at a network equipment manufacturer Ericsson (ERICY) before joining Verizon. Vestberg and Chief Strategy Officer Rima Qureshi, also a veteran of Ericsson, both joined Verizon in 2017.

VZ stock fundamentals in a growing industry

Revenue growth remains an issue. Verizon’s long-range problem is that the US wireless market is saturated. Many consumers have delayed upgrading to a new smartphone. Plus, data-hungry mobile video hasn’t become a big money maker.

VZ shares fell after the telecom giant reported second-quarter results and lowered expectations for this year.

For the June quarter, Verizon earnings came in at $1.31 a share, excluding items. Revenue rose 3% to $33.8 billion, beating estimates.

A year earlier, Verizon earned $1.37 a share on revenue of $34.77 billion. Analysts had predicted Verizon earnings of $1.33 a share on revenue of $33.77 billion.

In Verizon’s earnings report, second-quarter wireless services revenue jumped 9% to $18.4 billion versus analyst estimates of $18.39 billion.

For the full year 2022, Verizon forecasts adjusted EPS in the $5.10 to $5.25 range, down from its previous guidance of $5.40 to $5.55.

The telecom industry now projects adjusted EBITDA growth of negative 1.5% to flat from the previous guidance of 2% to 3% adjusted EBITDA growth.

Verizon Stock: 5G wireless to the rescue?

Verizon’s 5G mobile network uses both low- and high-frequency waves. Its lower-band 5G services are widely available, but don’t offer much improvement in data speeds over older 4G networks.

Verizon’s “Ultrawideband” or UWB 5G mobile service uses high mmWave frequency spectrum.

Verizon has partnered with Amazon Web Services, the cloud computing arm of Amazon.com (AMZN) to develop 5G applications for web-connected industrial devices. Another partner is IBM (IBM).

Experts expect 5G wireless networks to have a role in automated manufacturing, cloud gaming, autonomous vehicles, drones, and telemedicine services.

VZ Stock Analysis: Is It a Buy Now?

VZ shares hold a Relative Strength Rating 21 out of 99 best possible, according to Check out the IBD kho repository. The best stocks tend to have RS ratings of 80 or higher.

Verizon stock also holds a IBD Composite Rating 30 out of 99 best possible, according to Check out the IBD kho repository. The IBD Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or higher.

Verizon stock, meanwhile, has Cumulative/Distribution Rating of D-minus. That rating analyzes changes in a stock’s price and volume over the past 13 trading weeks. The rating, on an A+ to E scale, measures the buying and selling of stocks by institutions. A+ represents the purchase of multiple institutions; E means sell a lot. Think of point C as neutral.

As of October 10, VZ shares are no longer valid entry point. It needs to create a new base.

Investors can consider the 5G Stocksuch as a chip manufacturer or a network equipment supplier.

Meanwhile, emerging 5G wireless applications can take years to generate significant revenue. Instead of buying Verizon stock, income-oriented investors can consider Large ETFs like SPYtrack the S&P 500.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity, and cloud computing.

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