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Why Verizon Communications (VZ) Outpaced the Stock Market Today

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The latest trading session saw Verizon Communications (VZ - Free Report) ending at $44.13, denoting a +1.1% adjustment from its last day's close. This change outpaced the S&P 500's 0.55% gain on the day. Meanwhile, the Dow experienced a rise of 0.25%, and the technology-dominated Nasdaq saw an increase of 0.63%.

Coming into today, shares of the largest U.S. cellphone carrier had gained 1.51% in the past month. In that same time, the Computer and Technology sector gained 11.3%, while the S&P 500 gained 6.29%.

Analysts and investors alike will be keeping a close eye on the performance of Verizon Communications in its upcoming earnings disclosure. In that report, analysts expect Verizon Communications to post earnings of $1.18 per share. This would mark year-over-year growth of 2.61%. At the same time, our most recent consensus estimate is projecting a revenue of $33.49 billion, reflecting a 2.13% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $4.69 per share and a revenue of $137.09 billion, demonstrating changes of +2.18% and +1.71%, respectively, from the preceding year.

Any recent changes to analyst estimates for Verizon Communications should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.02% higher. Currently, Verizon Communications is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Verizon Communications has a Forward P/E ratio of 9.31 right now. This expresses a discount compared to the average Forward P/E of 21.36 of its industry.

It's also important to note that VZ currently trades at a PEG ratio of 3.24. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Wireless National industry was having an average PEG ratio of 3.24.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 165, which puts it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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