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We believe that the upgrade came on the back of Verizon Communications’ current efforts toward expanding and launching its 5G wireless network and the launching of its online TV streaming services.
Verizon has started conducting field trials for its upcoming 5G wireless network in 11 cities across the U.S. The company along with its partners plans to deploy its fixed wireless version in 2018. The company also aims to deploy small cells using the 3.5 GHz spectrum band, which goes well with its 5G strategy.
Moreover, the $3.1 billion deal to acquire Straight Path Communications Inc. (a leading provider of fixed wireless spectrum licenses) complements its 5G wireless expansion strategies. Straight Path Communications’ 28 GHz and 39 GHz millimeter wave spectrum bands bode well for 5G wireless services. The mmWave spectrum is assumed to be one of the building blocks of 5G. It offers speed and capacity which will enable users to do things like download an HD movie in seconds.
Verizon is also planning to launch an online TV streaming servicelater this year. The company has decided to launch dozens of channels nationwide for this specific service and thus poses tough competition to AT&T Inc.’s (T - Free Report) online TV streaming service, DirecTV Now andDish Network Corp.’s , Sling TV. Verizon and International Business Machines Corporation (IBM - Free Report) have recently decided to work on a number of strategic initiatives involving networking and cloud services.
On Jun 13, 2017, Verizon completed the acquisition of the core businesses of Yahoo! Inc. for $4.48 billion. The deal created a major player in the mobile media and advertising space and will boost Verizon’s digital media suite. Post this buyout, Oath, which will be a part of Verizon’s Media and Telematics organization, will be formed. Oath will be overseeing a diverse house of more than 50 media and technology brands under Yahoo and AOL Inc. (acquired by Verizon in Jun 2015), engaging more than a billion people globally.
Verizon’s unlimited data plans have bolstered the wireless industry. The company continues to solidify its foothold in the Internet of Things (IoT) and fiber space by inking different deals.
On the flip side, spectrum crunch is a major issue in the U.S. telecom industry and Verizon continues to operate in asaturated and competitive wireless market. Expenses related to Verizon’s promotional plans and lucrative discounts to lure more customers might impact the wireless segment’s EBITDA and its service margins in the first quarter of 2017. Segment EBITDA decreased 7.5% to $9,414 million in the reported quarter. EBITDA margin was 45.1% compared with 46.2% in the prior-year quarter.
The company’s wireline division continues to struggle with persistent losses in access lines owing to competitive pressure from voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies. Notably, total revenue in the first quarter of 2017 decreased 7.3% year over year to $29,814 million, missing the Zacks Consensus Estimate of $30,504 million. These are weighing the company’s revenues and margins. We believe these factors have led to the company’s below-par price performance.
In the last three months, share price of Verizon has declined 10.34% compared with the Zacks categorized U.S. Wireless National industry’s loss of 6.29%.
A legal notice from the city of New York in Mar 2017 in relation to its FiOS (Fiber Optic Service) rollout in the city came was a major setback. This shows the company’s failure to stand up to its commitments.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Here's Why You Should Hold on to Verizon (VZ) Amid Risks
On Jul 07, 2017, U.S. telecom behemoth, Verizon Communications Inc. (VZ - Free Report) was upgraded by a notch to a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We believe that the upgrade came on the back of Verizon Communications’ current efforts toward expanding and launching its 5G wireless network and the launching of its online TV streaming services.
Verizon has started conducting field trials for its upcoming 5G wireless network in 11 cities across the U.S. The company along with its partners plans to deploy its fixed wireless version in 2018. The company also aims to deploy small cells using the 3.5 GHz spectrum band, which goes well with its 5G strategy.
Moreover, the $3.1 billion deal to acquire Straight Path Communications Inc. (a leading provider of fixed wireless spectrum licenses) complements its 5G wireless expansion strategies. Straight Path Communications’ 28 GHz and 39 GHz millimeter wave spectrum bands bode well for 5G wireless services. The mmWave spectrum is assumed to be one of the building blocks of 5G. It offers speed and capacity which will enable users to do things like download an HD movie in seconds.
Verizon is also planning to launch an online TV streaming servicelater this year. The company has decided to launch dozens of channels nationwide for this specific service and thus poses tough competition to AT&T Inc.’s (T - Free Report) online TV streaming service, DirecTV Now andDish Network Corp.’s , Sling TV. Verizon and International Business Machines Corporation (IBM - Free Report) have recently decided to work on a number of strategic initiatives involving networking and cloud services.
On Jun 13, 2017, Verizon completed the acquisition of the core businesses of Yahoo! Inc. for $4.48 billion. The deal created a major player in the mobile media and advertising space and will boost Verizon’s digital media suite. Post this buyout, Oath, which will be a part of Verizon’s Media and Telematics organization, will be formed. Oath will be overseeing a diverse house of more than 50 media and technology brands under Yahoo and AOL Inc. (acquired by Verizon in Jun 2015), engaging more than a billion people globally.
Verizon’s unlimited data plans have bolstered the wireless industry. The company continues to solidify its foothold in the Internet of Things (IoT) and fiber space by inking different deals.
On the flip side, spectrum crunch is a major issue in the U.S. telecom industry and Verizon continues to operate in asaturated and competitive wireless market. Expenses related to Verizon’s promotional plans and lucrative discounts to lure more customers might impact the wireless segment’s EBITDA and its service margins in the first quarter of 2017. Segment EBITDA decreased 7.5% to $9,414 million in the reported quarter. EBITDA margin was 45.1% compared with 46.2% in the prior-year quarter.
The company’s wireline division continues to struggle with persistent losses in access lines owing to competitive pressure from voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies. Notably, total revenue in the first quarter of 2017 decreased 7.3% year over year to $29,814 million, missing the Zacks Consensus Estimate of $30,504 million. These are weighing the company’s revenues and margins. We believe these factors have led to the company’s below-par price performance.
In the last three months, share price of Verizon has declined 10.34% compared with the Zacks categorized U.S. Wireless National industry’s loss of 6.29%.
A legal notice from the city of New York in Mar 2017 in relation to its FiOS (Fiber Optic Service) rollout in the city came was a major setback. This shows the company’s failure to stand up to its commitments.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think. See This Ticker Free >>