Verizon Communications (VZ) lagged rivals AT&T (T) and T-Mobile US (TMUS) in 2024 as well as the S&P 500. Verizon stock still attracts income-oriented investors, thanks to its dividend. But a growth story has been lacking for VZ stock.
Amid top management changes, the company is focusing on generating growth in wireless service revenue, free cash flow and earnings before interest, taxes, depreciation and amortization.
Further, VZ stock has retreated about 3% in 2025. Verizon earnings are due Jan. 24. Wall Street analysts also expect the company to provide 2025 guidance.
For the December quarter, analysts project EPS of $1.09, up 1%, on revenue of $35.3 billion, also up 1%. Verizon is expected to add 350,000 postpaid phone subscribers, including “second line” accounts.
Investors in AT&T stock are bullish on “convergence” — selling landline broadband and wireless services in product bundles.
Frontier Acquisition On Track
In September, Verizon agreed to buy Frontier Communications (FYBR) for $20 billion in cash. In November, Frontier stockholders voted in favor of the proposed merger.
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Frontier is the largest pure play fiber provider in the U.S. with 10 million home passed expected by the end of 2026. The company has 2.2 million fiber network subscribers currently across 25 states.
What’s more, Verizon has increased its fixed wireless access subscriber goal to 8 million to 9 million by the end of 2028. That’s up from 4 million to 5 million 5G fixed broadband customers by the end of 2025.
Meanwhile, Apple (AAPL) sales of iPhone 16 models could be a factor in 2025. The iPhones 16 models feature “Apple Intelligence,” artificial intelligence apps.
Verizon Stock Fundamentals
Rising interest rates and Treasury bill yields have been a headwind for dividend-paying stocks. Further, a Verizon stock buyback has been delayed by purchases of radio spectrum needed for 5G wireless services.
New York-based Verizon may be in a tough position as wireless industry growth slows amid competition with AT&T and T-Mobile as well as cable TV companies. The Verizon brand also has lost some oomph as the company fights to regain its marketing claim to operating the highest quality wireless network.
However, it’s taking much longer than expected for 5G synergies to kick in. Verizon owns mid-band and high-frequency millimeter wave radio spectrum.
Verizon’s consumer wireless business has yet to get a material revenue lift from 5G smartphone users. Also, revenue from 5G business services using private networks has disappointed.
VZ Stock: No 5G Boost
Overall, revenue growth remains an issue. Data-gobbling mobile video hasn’t panned out as a big moneymaker. Verizon has focused on upgrading consumers to unlimited data plans to boost average monthly revenue per user.
Verizon expects 5G business services using private network links to gain momentum in 2025. Also, it’s investing in “mobile-edge compute” sites.
Verizon has partnered with Amazon Web Services, the cloud computing arm of Amazon (AMZN) to develop 5G apps for the web-connected industrial devices. Another partner is IBM (IBM).
What’s more, pundits expect 5G wireless to have a role in manufacturing automation, cloud gaming, autonomous vehicles, drones and remote health care services.
Verizon reported mixed third-quarter results as adjusted earnings beat views while revenue came in slightly below Wall Street targets.
In one bright spot, Verizon said it added 363,000 fixed wireless broadband customers in Q3. It had 4.2 million fixed wireless broadband customers as of Sept. 30.
Verizon Stock: Is It A Buy Right Now?
Whether Verizon stock is a buy depends on fundamental and technical factors as well as each investor’s own goals, strategy and risk tolerance.
In addition, Verizon stock holds a Relative Strength Rating of only 25 out of a best-possible 99, according to the IBD Stock Checkup. The best stocks tend to have RS ratings of 80 or better.
In addition, VZ stock has an IBD Composite Rating of 43 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. It’s a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.
Meanwhile, Verizon stock holds an Accumulation/Distribution Rating of D-minus. This rating analyzes price and volume changes in a stock over the past 13 weeks of trading. The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying; E means heavy selling. Think of the C grade as neutral.
As of Jan. 21, Verizon stock trades below its 50-day moving average, a bearish signal. VZ stock does not have an entry point and is not in a buy zone. It needs to form a base to be actionable.
Further, check out IBD Stock Lists and other IBD content to find dozens more of the best stocks to buy or watch.
Also, investors can sign up for email alerts on earnings and other news from Verizon investor relations.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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