Verizon Communications Inc (VZ) stock analysis

P/E above its 5-year median

Verizon Communications's P/E of 11.9 is above its own 5-year median of 10.0.

P/E below the industry

Verizon Communications's P/E of 11.9 is below the Telephone Communications median of 13.3.

EV/EBITDA above its 5-year median

Verizon Communications's EV/EBITDA of 7.3 is above its 5-year median of 7.0.

P/S above the industry

Verizon Communications's price-to-sales of 1.39 is above the Telephone Communications median of 1.27 (book value is negative, so we use sales).

Trading below fair value

The share price of $46.60 is below our fair value estimate of $58.03.

Margin of safety under 20%

The price is 19.7% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 0.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -7.1% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -17.2% over the last twelve months, against a 5-year average of -0.7% a year.

Growing slower than the industry

Revenue grew 1.4% over the last twelve months; the Telephone Communications median is 5.5%.

Guidance raised

Verizon Communications raised its 2026 Mobility and broadband service revenue growth outlook on Jul 24, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings shrank over 5 years

Net income shrank 0.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 11.8% over the last twelve months, against a 5-year average of 13.2%.

Net margin above the industry

Verizon Communications's net margin of 11.8% is above the Telephone Communications median of 6.5%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 23.5% of total debt.

Interest not well covered

Operating income covers interest expense 3.8 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.63 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 1.21; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Verizon Communications paid dividends worth 6.0% of the share price over the last twelve months.

Yield above Treasuries

The 6.0% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Verizon Communications yields 6.0%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 71.4% of net income.

Cash-flow cover

Needs dividends paid and free cash flow.