We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Verizon (VZ) 5G Plans on Track, Competition on the Rise
Read MoreHide Full Article
On Jul 26, we issued an updated research report on Verizon Communications Inc. (VZ - Free Report) . The company reported mixed financial numbers in the second quarter of 2016 wherein the top line missed the Zacks Consensus Estimate while the bottom line managed to beat the same.
Verizon is set for the initial deployment of 5G wireless networks in 2017. The company recently signed a Memorandum of Understanding (MoU) with SK Telecom Co. Ltd. (SKM - Free Report) to merge their 5G technical specifications on a global basis.
The acquisition of Yahoo’s core assets will help Verizon become the third major player in the $187 billion digital advertising space, well behind market leaders Google and Facebook. Verizon’s Internet-based mobile video service “Go90”, targeting the young generation, has been increasingly gaining traction.
Additionally, the company is strengthening its foothold in the fleet management and telematics businesses post the acquisitions of Telogis Inc. and Fleetmatics Grp Plc. Verizon is also focusing on online content delivery, mobile video and online advertising for growth. These businesses have the potential to generate significant revenues for the company, given that its legacy telecom business is facing serious pricing competition.
The Risks
The U.S. wireless market is almost saturated. Tough competition from smaller competitors like T-Mobile US (TMUS - Free Report) and Sprint Corp. (S - Free Report) are increasing by the day. In the second quarter of 2016, Verizon’s postpaid wireless customer addition was down 45.8% year over year. Quarterly retail postpaid churn rate was 0.94% compared with 0.90% in the year-ago quarter whereas total retail churn rate was 1.19% against 1.18% in the year-ago quarter.
Meanwhile, spectrum crunch has become a major issue for the U.S. telecom industry. Also, Verizon’s Go90 app has recently disappointed audiences and advertisers. Moreover, in order to expand its customer base, Verizon continues to spend heavily on promotions and offers lucrative discounts which may further impact its EBITDA and EBITDA service margins at the wireless segment. The company’s wireline division is also grappling with persistent losses in access lines due to competitive pressure from voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data, video) offerings by cable companies.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Verizon (VZ) 5G Plans on Track, Competition on the Rise
On Jul 26, we issued an updated research report on Verizon Communications Inc. (VZ - Free Report) . The company reported mixed financial numbers in the second quarter of 2016 wherein the top line missed the Zacks Consensus Estimate while the bottom line managed to beat the same.
Verizon is set for the initial deployment of 5G wireless networks in 2017. The company recently signed a Memorandum of Understanding (MoU) with SK Telecom Co. Ltd. (SKM - Free Report) to merge their 5G technical specifications on a global basis.
The acquisition of Yahoo’s core assets will help Verizon become the third major player in the $187 billion digital advertising space, well behind market leaders Google and Facebook. Verizon’s Internet-based mobile video service “Go90”, targeting the young generation, has been increasingly gaining traction.
Additionally, the company is strengthening its foothold in the fleet management and telematics businesses post the acquisitions of Telogis Inc. and Fleetmatics Grp Plc. Verizon is also focusing on online content delivery, mobile video and online advertising for growth. These businesses have the potential to generate significant revenues for the company, given that its legacy telecom business is facing serious pricing competition.
The Risks
The U.S. wireless market is almost saturated. Tough competition from smaller competitors like T-Mobile US (TMUS - Free Report) and Sprint Corp. (S - Free Report) are increasing by the day. In the second quarter of 2016, Verizon’s postpaid wireless customer addition was down 45.8% year over year. Quarterly retail postpaid churn rate was 0.94% compared with 0.90% in the year-ago quarter whereas total retail churn rate was 1.19% against 1.18% in the year-ago quarter.
Meanwhile, spectrum crunch has become a major issue for the U.S. telecom industry. Also, Verizon’s Go90 app has recently disappointed audiences and advertisers. Moreover, in order to expand its customer base, Verizon continues to spend heavily on promotions and offers lucrative discounts which may further impact its EBITDA and EBITDA service margins at the wireless segment. The company’s wireline division is also grappling with persistent losses in access lines due to competitive pressure from voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data, video) offerings by cable companies.
Verizon currently has a Zacks Rank #3 (Hold).
VERIZON COMM Price
VERIZON COMM Price | VERIZON COMM Quote
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>