VZ Stock Price-The Horizon for Verizon Communications Inc.

VZ Stock Price Analysis (VZ:NYE):

Last Closing Price: $38.24

Consensus Analyst Rating: Buy

12-Month Price Target: $49.02

Market CAP: $163.88 Billion

 

Article Highlights:

  • Following the most recent results announcement, VZ stock price reached a 12-year low.
  • The turnover rate is at a multi-year high.
  • Verizon, on the other hand, leads the industry in every subscriber segment and has the greatest average revenue per user.

 

As it pertains to Verizon Communications Inc. (VZ:NYE), bears are crushing bulls. Bears will point out that Verizon has a substantial debt burden and is competing with a larger T-Mobile (TMUS:NSD) and a smaller AT&T.

In addition, Verizon has lost market share in total phones and postpaid phones every quarter since Q2 2020. Verizon lost 16,000 wireless subscribers within the first nine months of this year alone. AT&T added 1.7 million net subscribers during the same period, while T-Mobile added 1.1 million.

This basically explains why T-Mobile shares have risen, AT&T’s have soared, and VZ stock price has dropped approximately 26% over the past year.

Despite the fact that losses in subs and high debt levels support the bear case, there are certain aspects that support the bull case. VZ is, in some ways, the best firm of the three, and one must ask if the VZ stock price decline represents an investing opportunity.

 

Why VZ Stock Price Fell?

Prior to the release of Q1 22 earnings in late April, Verizon’s stock was outperforming the market by a considerable margin.

Net income and earnings per share decreased year-over-year due to greater operational expenses. The cash flow from operating activities decreased by $2.9 billion year-over-year to $6.8 billion. Capital expenditures multiplied by more than four, while the company’s enormous debt climbed by $1.9 billion.

As is typical for the company throughout each quarter, Verizon lost net postpaid phone users in the first quarter (36,000), albeit this was the lowest loss since the first quarter of 2018.

There were few positives in the study overall. Nonetheless, I will argue that the fundamental cause of the VZ stock price decrease was a dismal prognosis for 2022.

The management expected that reported wireless service revenue growth, adjusted EBITDA growth, and adjusted earnings per share would all fall below the previous range.

Following these results, Verizon investors suffered their largest single-day loss since the 2020 COVID meltdown. Within a week, VZ stock price dropped from the mid-50s to the mid-40s. However, the stock quickly recovered, surpassing $52 within two months.

The second shoe to drop was the second-quarter earnings.

A loss of 12,000 net postpaid phone users, the worst performance for this indicator in a second quarter in a decade, and management’s reduced expectations once again depressed the stock price.

Postpaid revenue, which accounts for more than 80 percent of total service revenue, increased by 2.2%, although at a rate that was half that of the previous year.

Verizon’s prediction for wireless service revenue growth decreased from a prior range of 9 to 10 percent to a new range of 8.5 to 9.5%. The growth rate of service and other revenue was altered from flat to flat to -1%. Adjusted EBITDA growth was reduced from 2% to 3% to -1.5% to flat, while the expectation for adjusted EPS was reduced from $5.40 to $5.55 to $5.10 to $5.25.

The price per share dropped. In contrast to the decline that followed the release of Q1 data, there was no following recovery in the VZ stock price.

The results in the third quarter did little to change the tide. Even though Verizon exceeded the consensus revenue forecast by $410 million and the average earnings per share forecast by $0.03, the company nevertheless underperformed the market. Simultaneously, the company reported a meagre 8,000 postpaid phone net additions and a retail postpaid phone churn rate of 0.92 percent.

What is the consequence of three consecutive quarters of subpar performance? Verizon’s stock reached a 12-year low.

 

The Bullish Perspective:

It is usual for analysts to compare Verizon’s meager net postpaid phone additions against AT&T’s significant postpaid phone customer growth. In the third quarter alone, VZ lost 189,000 wireless postpaid phone customers, while AT&T added 708,000 postpaid phone consumers.

However, this perspective is quite shortsighted. Additionally, Verizon reported 229k total broadband net additions in Q1, 268k in Q2, and 377k in Q3, for a year-to-date increase of 874,000 net broadband additions.

In comparison, there were around 477 thousand broadband connections as of December 31, 2021.

Verizon may now offer fixed wireless service to over 40 million potential customers, with the ultimate objective of reaching 64 million residences.

The Business Verizon added 197,000 postpaid phone net customers during the quarter, marking the fifth consecutive quarter in which it added more than 150,000 postpaid phone net customers.

Total revenue and total wireless service revenue also increased from the previous quarter and year.

The recent acquisition of TracFone’s prepaid cellular business contributed significantly to the 10% increase in wireless service revenue. Additionally, the business generated 34,000 TracFone net additions, the first increase for Tracfone since the first quarter of 2021.

 

Debt, Dividend, And Valuation:

At the end of the third quarter, VZ’s debt decreased from $151 billion in 2021 to $147.9 billion. $15 billion is expected within the next year.

The corporation has cash and equivalents totaling $2.1 billion.

The debt commitments of Verizon are subject to changing interest rates. In this climate, this causes the interest on the existing debt to increase. Management halted stock repurchases in order to concentrate on debt payments.

S&P assesses Verizon’s debt as BBB+/stable, while Moody’s assigns a Baa1/stable rating.

The current yield is 6.92 percent. The payout ratio is 48.63%, and the dividend growth rate over the past five years is a little around 2%.

Verizon trades for $37.90 per share. The average one-year price estimate of the company’s 21 analysts is $48.60. The average price target among the eight analysts who graded the stock after the most recent earnings report is $43.12.

The forward P/E for VZ is 8.00X, compared to the stock’s 5-year average P/E of 11.51x. In recent weeks, the stock has traded at levels not seen in more than a decade.

 

Should You Buy, Sell, or Hold Verizon?

Clearly, Verizon has fallen behind competitors in terms of net postpaid phone users, but this is mostly attributable to management’s choice to increase plan rates.

It is also true that debt is increasing and that net income, EPS, and other widely monitored metrics are declining. However, this is mostly due to an increase in the capital expenditures required to develop the 5G network. It should be emphasized that the company’s competitors are likewise heavily indebted and investing significant sums in capital expenditures.

In fact, Verizon’s debt is rated one level higher than AT&T’s and two levels higher than T- Mobile’s.

By focusing on postpaid figures and debt, bears are disregarding a range of good firm statistics.

Moreover, when evaluating a potential investment in Verizon, I feel it is essential to compare the company to AT&T and TMUS. The three constitute an oligopoly, contending with the same business environment and vying for the same clients. If, as JD Power asserts, Verizon has the greatest network of the three, and if the firm also has the highest credit rating, I believe VZ will have the upper hand in the long run.

If I were to pinpoint a potential long-term problem for Verizon, I would point to the overcrowded U.S. wireless industry, but this also applies to competitors.

Considering the company’s long-term potential, I find the current share price to be rather attractive. I believe that investors seeking a stable, substantial yield will eventually create conditions in which the stock retraces its mean.

Consequently, Stock Target Advisor grades VZ as a “BUY” for those seeking a stable, robust dividend.

Iridium Communications (NASDAQ:IRDM) Barclays Downgrades Rating

Morgan Stanley maintains the Overweight rating, and boosts the target to $64 from $50.

Iridium Communications stock forecasts from 2 analysts, has the average target on Iridium stock at $54.50 over the next 12 months. Iridium Communications average consensus rating is listed as a Buy . Stock Target Advisor’s own stock analysis  of the stock is Slightly Bearish, based on 3 positive and 7 negative signals that were detected. The stock’s last closing price was at  $49.38.

The latest Crowd Analyst Rating is a Strong Buy, with a 12 month target forecast on the stock at $60 per share.

The latest analyst change came in a research note distributed to investors on Wednesday, when Barclays cut Iridium Communications (NASDAQ:IRDM) to a “Equal Weight” rating. The analyst has also lowered their previous price estimate of $48.00 to $45.00 for the technology company’s stock. According to Barclays’ price objective, the company’s current price might decrease by as much as 8.87%.

There have been several further research studies about IRDM. In a research note published on Monday, Morgan Stanley raised its price objective for Iridium Communications from $50.00 to $64.00 and assigned the firm a “overweight” rating. On Wednesday, October 12th, StockNews.com began covering Iridium Communications in a report. They gave the company a “buy” recommendation. One research analyst gave the stock a hold recommendation, four gave the stock a buy rating, and one gave the firm a strong buy rating. Iridium Communications presently has a consensus rating of “Buy” and an average target price of $52.80.

 

Latest Analyst Ratings for IRDM’s Stock:

Barclays Downgraded to Equal-Weight, cuts target tp $45 from $48.

Morgan Stanley maintains the Overweight rating, and boosts the target to $64 from $50.

The stock was upgraded by Raymond James Capital to a Strong-Buy, moved target up to $51 from 47.

 

The company last released information on its quarterly earnings. For the quarter, the technology company reported $0.04 EPS. Iridium Communications had a 0.05% negative net margin and 0.09% negative return on equity. Contrary to the consensus forecast of $166.46 million, the company’s revenue for the quarter was $174.90 million. The company generated $0.03 EPS in the same quarter last year. In comparison to the same quarter previous year, the company’s quarterly sales increased by 16.6%. Iridium Communications is anticipated to report 0.12 EPS for the current year, according to research experts.

Also, just recently, insider Kathleen A. Morgan sold 3,000 shares of the company’s stock. The stock was sold for a total of $144,000.00 at an average price of $48.00. Following the sale, the insider now owns 45,963 shares in the business, which are worth $2,206,224. The Securities & Exchange Commission’s website provides access to the filing in which the transaction was disclosed. In other news, on Thursday, October 6th, insider Kathleen A. Morgan sold 3,000 shares of the business’s stock. The shares were sold for a total of $144,000.00 at an average price of $48.00 per share. The insider now directly owns 45,963 shares of the business, worth $2,206,224, after the transaction. The Securities & Exchange Commission received information on the transaction in a document, which is accessible through this link. Additionally, on Monday, August 15th, insider Suzanne E. Mcbride sold 7,500 shares of the business’s stock. A total of $350,100.00 was spent on the sale of the stock, which was sold at an average price of $46.68. Following the transaction’s conclusion, the insider now directly owns 110,553 company shares, worth $5,160,614.04. You can read the disclosure for this sale here. Over the past quarter, insiders have sold 175,301 shares of company stock worth a total of $7,954,783. 2.50 % of the stock of the firm is held by insiders.

Hedge funds have recently changed how much of the stock they own. During the first quarter, CWM LLC boosted its stake in Iridium Communications by 95.0%. After purchasing an additional 360 shares during the most recent quarter, CWM LLC now owns 739 shares of the technology company’s stock, valued at $30,000. During the second quarter, SeaCrest Wealth Management LLC added a new $38,000 investment in Iridium Communications. During the second quarter, Fifth Third Bancorp boosted its stake in Iridium Communications by 107.8%. Fifth Third Bancorp purchased an additional 608 shares of the technology company’s stock during the most recent quarter, for a total acquisition of 1,172, valued at $44,000. During the second quarter, Counterpoint Mutual Funds LLC added a new $128,000 investment in Iridium Communications. And last, during the second quarter, Spire Wealth Management grew its holdings in Iridium Communications by 237.1%. Spire Wealth Management now owns 3,348 more shares of the technology company’s stock valued at $179,000 than it did three months ago. Hedge funds and institutional investors hold 85.69% of the stock.

 

 

Analysts rate Telus Corp.(T:TSX) with a Buy rating and a target price of $32

Telus Corp Stock Analysis:

Analysts rate Telus Corp. with a consensus Buy rating and a 12-month average target price of $32.17 per share.

This week Scotiabank Capital maintained Telus Corp. with an Outperform rating and lowered the target price on the company’s stock to $31.50 from $34.50.

Based on the Telus Corp stock forecasts from 11 analysts, the average analyst target price for Telus Corp is CAD 32.17 over the next 12 months. Telus Corp’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of Telus Corp is Neutral, which is based on 8 positive signals and 7 negative signals. At the last closing, Telus Corp’s stock price was CAD 26.63Telus Corp’s stock price has changed by -5.93% over the past week, -9.64% over the past month and -2.81% over the last year.

What we like:

Superior risk adjusted returns

This stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Low volatility

The stock’s annual returns have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Superior total returns

The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced on cashflow basis

The stock is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Analysts rate Telus Stock (T:CA:TSX) with a Buy rating and CAD 32 price target

Based on the Telus Stock Forecast from 11 analysts, the average analyst Telus stock price target is CAD 32.17 over the next 12 months. Telus Corp’s average analyst rating is Buy. Stock Target Advisor’s own stock analysis of Telus Corp is Neutral, which is based on 8 positive signals and 7 negative signals. At the last closing, Telus Corp’s stock price was CAD 26.92Telus Corp’s stock price has changed by -1.63% over the past week, -2.41% over the past month and -1.75% over the last year.

 

About Telus Corp. (T:CA:TSX):

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. The Technology Solutions segment offers a range of telecommunications products and services; network revenue; mobile technologies equipment sale; data revenues, such as internet protocol; television; hosting, managed information technology, and cloud-based services; software, data management, and data analytics-driven smart food-chain technologies; home and business security; healthcare software and technology solutions; and voice and other telecommunications services. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was incorporated in 1998 and is headquartered in Vancouver, Canada.

 

What we like:

Superior risk adjusted returns

Telus stock has performed well, on a risk adjusted basis, compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile.

Low volatility

The annual returns for Telus stock have been stable and consistent compared to its sector peers(for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Superior total returns

Telus stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Low debt

The company is less leveraged than its peers, and is among the top quartile, which makes it more flexible. However, do check the stock analysis and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Revenue Growth

Telus stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

Telus stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What we don’t like:

Low market capitalization

Telus stock is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Overpriced compared to earnings

Telus stock price is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced on cashflow basis

Telus stock price is trading high compared to its peers on a price to cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on free cash flow basis

Telus stock price is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Analysts rate Cogeco Communications Inc.(CCA:TSX) with a Buy rating and a $113 target

Cogeco Communications Inc Stock Analysis:

Analysts rate Cogeco Communications Inc. with a consensus Buy rating and a 12-month average target price of $113.08 per share.

Based on the Cogeco Communications Inc stock forecasts from 7 analysts, the average analyst target price for Cogeco Communications Inc is CAD 113.08 over the next 12 months. Cogeco Communications Inc’s average analyst rating is Buy . Stock Target Advisor’s own stock analysis of Cogeco Communications Inc is Slightly Bullish , which is based on 11 positive signals and 6 negative signals. At the last closing, Cogeco Communications Inc’s stock price was CAD 72.43Cogeco Communications Inc’s stock price has changed by +0.39% over the past week, -8.30% over the past month and -35.40% over the last year.

About Cogeco Communications Inc (CCA:CA:TSX)

Cogeco Communications Inc. operates as a communications corporation in North America. It operates in two segments, Canadian Broadband Services and American Broadband Services. The company offers Internet, video, and telephony services to residential and business customers through its two-way broadband fiber networks. It provides Internet services using modems, Wi-Fi gateways, and extenders either on a rental basis or as part of the Internet service package; video services on a subscription basis; home phone services using Internet protocol (IP); local and long-distance calling services; broadband Internet services; and IP based telephony services and other network connectivity services delivered over fiber optic connection to larger businesses. The company serves the primary service units, Internet, video, and telephony service customers. It offers cable operator services under the Cogeco Connexion name in Québec and Ontario, and in the United States under the Atlantic Broadband brand. The company was formerly known as Cogeco Cable Inc. and changed its name to Cogeco Communications Inc. in January 2016. Cogeco Communications Inc. was founded in 1972 and is headquartered in Montreal, Canada. Cogeco Communications Inc. operates as a subsidiary of Cogeco Inc.

What we like:

Superior total returns

The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Underpriced compared to book value

The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced on cashflow basis

The stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior return on equity

The company management has delivered better return on equity in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior capital utilization

The company management has delivered better return on invested capital in the most recent 4 quarters than its peers, placing it in the top quartile.

Superior return on assets

The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

Superior Earnings Growth

This stock has shown top quartile earnings growth in the previous 5 years compared to its sector.

Superior Revenue Growth

This stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

High Gross Profit to Asset Ratio

This stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

What we don’t like:

Low market capitalization

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.