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Verizon Rises 9.5% Year to Date: Should You Invest in VZ Stock Now?

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Key Takeaways

  • Verizon has risen 9.5% YTD but trails AT&T's 27.7% and T-Mobile's 15.9% gains.
  • New plans like Family Plus and Tracfone Freedom are boosting Verizon's customer base.
  • Heavy spending on fiber, 5G, and promotions supports growth but pressures margins.

Verizon Communications Inc. (VZ - Free Report) has gained 9.5% in the year-to-date period compared with the Wireless National industry’s growth of 15.9%. The stock has underperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.

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Shares of the company have underperformed its peers like AT&T Inc. (T - Free Report) and T-Mobile US, Inc. (TMUS - Free Report) . Shares of AT&T and T-Mobile have returned 27.7% and 15.9%, respectively, during this period.

VZ Gains on Customer-Focused Approach, Fiber Expansion

Verizon is offering various mix-and-match pricing in both wireless and home broadband plans, which has led to solid customer additions. The company recently introduced Verizon Family Plus with enticing features. With just $10/month, subscribers get access to a wide range of services that cater to digital wellness and safety tools for all the family members. The plan includes content filters, screen time controls allowing parents to take control of device usage of children. It also comes with driving insights for teens, unlimited location check-ins, roadside assistance and other tailored features for elderly members of the family. 

Verizon also recently launched Tracfone Freedom, its first unlimited talk, text and data plan at $45 per month with Auto-pay. The plan provides 5G access, fraud protection capabilities. It offers a discount to military and veterans. The plan comes with international connectivity for calling, texting and roaming in Canada & Mexico and flexible 3, 6, 12-month variants.

Verizon is aggressively forging ahead to expand its fiber optics networks to support 4G LTE and 5G wireless standards, as well as wireline connections. In the second quarter, the company secured the FCC’s approval for its acquisition of Frontier Communications. The buyout has significantly augmented the company’s fiber infrastructure footprint nationwide. The company is also making necessary capital expenditures due to the continued expansion of 5G mmWave in new and existing markets, and the densification of the 4G LTE wireless network to cater to huge traffic demands across multiple verticals.

Major Challenges for Verizon

Verizon faces stiff competition from major industry leaders AT&T and T-Mobile in all the verticals in which it operates. AT&T has launched new wireless plans with enticing features tailored for people aged 55 and above. By opting for the plan, customers can get one line for $40/month or two lines for $35/month with unlimited talk, text and data. T-Mobile offers unlimited talk and text at $40 per month with Autopay for its basic mobile plan. With a five-year price guarantee, it offers 15GB of premium data. Hence, with T and TMUS also rolling out enticing offerings, acquiring customers in a highly saturated market won’t be easy for Verizon.

In a bid to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts. Although the customer-first strategy is designed to woo new customers and retain existing ones, it is likely to strain margins. Macroeconomic challenges continue to impact net sales in its Business segment.

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Estimate Revision Trend of VZ

Earnings estimates for 2025 have increased 0.21% to $4.7 over the past 60 days, while the same for 2026 has improved 0.41% to $4.94.

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Key Valuation Metric of VZ

From a valuation standpoint, VZ appears to be trading relatively cheaper compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 9.01 forward earnings, lower than 13.7 for the industry.

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End Note

Verizon’s multi-dimensional approach and customer-focused strategies are driving growth in the Consumer segment. AI advancements and the growing adoption of IoT devices are driving demand for high-speed connectivity. Verizon is swiftly expanding its fiber network and enhancing its 4G LTE and 5G infrastructure to meet the emerging requirements. Such initiative bodes well for sustainable growth.

However, fierce competition in the U.S. wireless market limits growth potential. Weakness in some verticals stemming from macroeconomic challenges remains a major concern. With a Zacks Rank #3 (Hold), VZ appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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