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Verizon Communications (VZ) Increases Yet Falls Behind Market: What Investors Need to Know

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The most recent trading session ended with Verizon Communications (VZ - Free Report) standing at $39.94, reflecting a +0.03% shift from the previouse trading day's closing. This change lagged the S&P 500's 0.73% gain on the day. At the same time, the Dow added 0.16%, and the tech-heavy Nasdaq gained 0.98%.

The the stock of largest U.S. cellphone carrier has fallen by 7.46% in the past month, lagging the Computer and Technology sector's gain of 3.28% and the S&P 500's gain of 0.34%.

The investment community will be paying close attention to the earnings performance of Verizon Communications in its upcoming release. In that report, analysts expect Verizon Communications to post earnings of $1.10 per share. This would mark year-over-year growth of 1.85%. Our most recent consensus estimate is calling for quarterly revenue of $35.4 billion, up 0.78% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.61 per share and a revenue of $134.44 billion, indicating changes of -2.12% and +0.35%, respectively, from the former year.

It is also important to note the recent changes to analyst estimates for Verizon Communications. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% lower. Verizon Communications presently features a Zacks Rank of #3 (Hold).

Looking at its valuation, Verizon Communications is holding a Forward P/E ratio of 8.65. This valuation marks a discount compared to its industry's average Forward P/E of 21.12.

It is also worth noting that VZ currently has a PEG ratio of 3.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Wireless National industry had an average PEG ratio of 3.42 as trading concluded yesterday.

The Wireless National industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 136, positioning it in the bottom 46% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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