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Should You Buy, Sell or Hold VZ Stock Ahead of Q2 Earnings?
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Key Takeaways
VZ is expected to post Q2 earnings of $1.18 per share on $33.6B in revenue, with likely earnings beat.
New 5G contracts, network slicing for first responders and bundling strategies may boost segment revenues.
High costs, margin pressure, weak wireline performance and 1.7% stock decline weigh on Verizon.
Verizon Communications Inc. (VZ - Free Report) is scheduled to report second-quarter 2025 earnings on July 21. The Zacks Consensus Estimate for sales and earnings is pegged at $33.6 billion and $1.18 per share, respectively. Earnings estimates for VZ have declined marginally from $4.69 per share to $4.68 for 2025, but increased from $4.86 per share to $4.90 for 2026 over the past 30 days.
VZ Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The communication services provider has a solid trailing four-quarter earnings surprise history, having exceeded expectations on each occasion. It delivered a four-quarter earnings surprise of 1.53%, on average. In the last reported quarter, the company pulled off an earnings surprise of 3.48%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Verizon for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. That is exactly the case here.
Verizon is offering various mix-and-match pricing in wireless and home broadband plans, which have historically led to increased adoption of 5G devices and premium unlimited plans. In addition to various bundle plans for varied streaming services, it offers customers greater control and flexibility over their preferred content selections, allowing them to pay only for what they want.
During the to-be-reported quarter, Verizon secured a multibillion-dollar contract to provide a Private 5G Network along the River Thames Estuary in the United Kingdom – one of the busiest maritime logistics hubs in the region – with trades worth £130 billion per year. Serving multiple key logistics, manufacturing and innovation sites across the river, the Private 5G Network buildout will provide a scalable, long-term connectivity foundation for advanced data, AI, edge computing and IoT infrastructure deployments aimed at transforming port and manufacturing operations.
The company launched its network slice for first responders in more than 20 markets, officially making the offering available nationwide wherever it offers 5G Ultra Wideband service. The Verizon Frontline Network Slice is a virtual network slice dedicated exclusively to public safety. This helps first responders with several key advantages, including dedicated 5G network connectivity, enhanced reliability and flexible scalability to allocate dedicated network resources in real time. This is likely to have translated into healthy customer additions and higher revenues from the Consumer segment.
The Zacks Consensus Estimate for revenues from the Consumer segment is pegged at $25.69 billion, while our model projects revenues of $25.63 billion.
During the reported quarter, Verizon introduced Edge Transportation Exchange, a state-of-the-art mobile-network vehicle-to-everything (V2X) communication platform for connected vehicles. The cutting-edge solution incorporates Verizon’s industry-leading 5G, LTE mobile networks, Verizon 5G Edge mobile edge compute to enable vehicles to communicate and share important data. These are likely to have translated into incremental revenues in the Business segment.
The Zacks Consensus Estimate for revenues from the Business segment is pegged at $7.26 billion, while our model projects revenues of $7.29 billion.
However, adverse foreign currency translations, infrastructure investments and high operating costs for 5G deployments are likely to have led to soft margins in the quarter. Verizon has announced a three-year price lock guarantee for all its myPlan and myHome network plans. This ensures that the core monthly plan price for calling, data and texting will not change in the next three-year period, excluding taxes, fees and perks. Although this customer-centric model will entice new customers, the promotional offers and lucrative discounts are expected to have weighed on margins. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies.
Verizon also recorded high capital expenditures for the launch and continued build-out of its 5G Ultra-Wideband network, deployment of significant fiber assets across the country and Intelligent Edge Network architecture upgrades.
Price Performance
Over the past year, VZ has declined 1.7% against the industry’s growth of 18.5%. It has also underperformed its peers like AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) over this period. While AT&T gained 40.9%, T-Mobile was up 23.2%.
One-Year VZ Stock Price Performance
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Verizon appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 8.6 forward earnings, lower than 12.91 for the industry and the stock’s mean of 8.97.
Image Source: Zacks Investment Research
Investment Considerations
By investing steadily in fiber infrastructure and pioneering new technologies, Verizon is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. This is likely to translate into solid subscriber growth, higher average revenue per user and increased broadband and fiber penetration.
However, high capital expenditures due to the continued expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network and the deployment of the fiber infrastructure have eroded margins. An ongoing shift from traditional linear video to over-the-top offerings, along with a competitive and almost saturated U.S. wireless market, is likely to further weigh on the company’s revenues in the future.
End Note
Verizon seems to be treading in the middle of the road, and new investors could be better off if they trade with caution. It appears that the recent initiatives have mostly fallen flat as it plays a catch-up game with its rivals. With declining earnings estimates, the stock is witnessing a negative investor perception. Consequently, it might not be a prudent investment decision to bet on the stock at the moment.
However, a single quarter’s results are not so important for long-term stakeholders and investors already owning the stock could stay put. In addition, an attractive valuation and focus on the deployment of a cloud-native, container-based, virtualized architecture for higher flexibility, scalability and cost efficiency across its network will likely reap long-term benefits.
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Should You Buy, Sell or Hold VZ Stock Ahead of Q2 Earnings?
Key Takeaways
Verizon Communications Inc. (VZ - Free Report) is scheduled to report second-quarter 2025 earnings on July 21. The Zacks Consensus Estimate for sales and earnings is pegged at $33.6 billion and $1.18 per share, respectively. Earnings estimates for VZ have declined marginally from $4.69 per share to $4.68 for 2025, but increased from $4.86 per share to $4.90 for 2026 over the past 30 days.
VZ Estimate Trend
Image Source: Zacks Investment Research
Earnings Surprise History
The communication services provider has a solid trailing four-quarter earnings surprise history, having exceeded expectations on each occasion. It delivered a four-quarter earnings surprise of 1.53%, on average. In the last reported quarter, the company pulled off an earnings surprise of 3.48%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts an earnings beat for Verizon for the second quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. That is exactly the case here.
Verizon currently has an ESP of +0.18% with a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming Results
Verizon is offering various mix-and-match pricing in wireless and home broadband plans, which have historically led to increased adoption of 5G devices and premium unlimited plans. In addition to various bundle plans for varied streaming services, it offers customers greater control and flexibility over their preferred content selections, allowing them to pay only for what they want.
During the to-be-reported quarter, Verizon secured a multibillion-dollar contract to provide a Private 5G Network along the River Thames Estuary in the United Kingdom – one of the busiest maritime logistics hubs in the region – with trades worth £130 billion per year. Serving multiple key logistics, manufacturing and innovation sites across the river, the Private 5G Network buildout will provide a scalable, long-term connectivity foundation for advanced data, AI, edge computing and IoT infrastructure deployments aimed at transforming port and manufacturing operations.
The company launched its network slice for first responders in more than 20 markets, officially making the offering available nationwide wherever it offers 5G Ultra Wideband service. The Verizon Frontline Network Slice is a virtual network slice dedicated exclusively to public safety. This helps first responders with several key advantages, including dedicated 5G network connectivity, enhanced reliability and flexible scalability to allocate dedicated network resources in real time. This is likely to have translated into healthy customer additions and higher revenues from the Consumer segment.
The Zacks Consensus Estimate for revenues from the Consumer segment is pegged at $25.69 billion, while our model projects revenues of $25.63 billion.
During the reported quarter, Verizon introduced Edge Transportation Exchange, a state-of-the-art mobile-network vehicle-to-everything (V2X) communication platform for connected vehicles. The cutting-edge solution incorporates Verizon’s industry-leading 5G, LTE mobile networks, Verizon 5G Edge mobile edge compute to enable vehicles to communicate and share important data. These are likely to have translated into incremental revenues in the Business segment.
The Zacks Consensus Estimate for revenues from the Business segment is pegged at $7.26 billion, while our model projects revenues of $7.29 billion.
However, adverse foreign currency translations, infrastructure investments and high operating costs for 5G deployments are likely to have led to soft margins in the quarter. Verizon has announced a three-year price lock guarantee for all its myPlan and myHome network plans. This ensures that the core monthly plan price for calling, data and texting will not change in the next three-year period, excluding taxes, fees and perks. Although this customer-centric model will entice new customers, the promotional offers and lucrative discounts are expected to have weighed on margins. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies.
Verizon also recorded high capital expenditures for the launch and continued build-out of its 5G Ultra-Wideband network, deployment of significant fiber assets across the country and Intelligent Edge Network architecture upgrades.
Price Performance
Over the past year, VZ has declined 1.7% against the industry’s growth of 18.5%. It has also underperformed its peers like AT&T Inc. (T - Free Report) and T-Mobile US Inc. (TMUS - Free Report) over this period. While AT&T gained 40.9%, T-Mobile was up 23.2%.
One-Year VZ Stock Price Performance
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, Verizon appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 8.6 forward earnings, lower than 12.91 for the industry and the stock’s mean of 8.97.
Image Source: Zacks Investment Research
Investment Considerations
By investing steadily in fiber infrastructure and pioneering new technologies, Verizon is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. This is likely to translate into solid subscriber growth, higher average revenue per user and increased broadband and fiber penetration.
However, high capital expenditures due to the continued expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network and the deployment of the fiber infrastructure have eroded margins. An ongoing shift from traditional linear video to over-the-top offerings, along with a competitive and almost saturated U.S. wireless market, is likely to further weigh on the company’s revenues in the future.
End Note
Verizon seems to be treading in the middle of the road, and new investors could be better off if they trade with caution. It appears that the recent initiatives have mostly fallen flat as it plays a catch-up game with its rivals. With declining earnings estimates, the stock is witnessing a negative investor perception. Consequently, it might not be a prudent investment decision to bet on the stock at the moment.
However, a single quarter’s results are not so important for long-term stakeholders and investors already owning the stock could stay put. In addition, an attractive valuation and focus on the deployment of a cloud-native, container-based, virtualized architecture for higher flexibility, scalability and cost efficiency across its network will likely reap long-term benefits.