Verizon Earnings Preview: Look For The Upward Trend To Continue
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 23 2019
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Source: SeekingAlpha
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Analyst Views on VZ
Wall Street analysts forecast VZ stock price to fall
14 Analyst Rating
4 Buy
10 Hold
0 Sell
Moderate Buy
Current: 47.070
Low
43.00
Averages
46.42
High
51.00
Current: 47.070
Low
43.00
Averages
46.42
High
51.00
About VZ
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, technology, information and streaming products and services to consumers, businesses and government entities. Its Consumer segment provides wireless and wireline communications services. It also provides fixed wireless access (FWA) broadband through its 5G or 4G Long-Term Evolution (LTE) networks portfolio. The Company's Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long-distance voice services and network access to deliver various Internet of Things (IoT) services and products. It provides these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Plan Introduction: The Verizon Simplicity plan removes network tiers, allowing all customers to enjoy the same 5G service, while the Verizon One plan combines mobility and home services into a single bill, improving user experience.
- Incentive Measures: The new plan offers new and existing customers a 3% cash back in Verizon Dollars every month, along with weekly sweepstakes for prizes like dining vouchers and a chance to watch the World Cup, which not only boosts customer engagement but may also increase loyalty.
- Market Reaction: Despite Verizon's strategy to attract customers through flexible pricing and bundled services, the news has had a limited impact on Verizon's stock price, with rivals AT&T and T-Mobile also showing little movement.
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- Satellite Network Expansion: Verizon's satellite assets have increased to 2,600, with the new Multi-Orbit Off-Road Trailer capable of switching satellites during extreme weather, ensuring 5G connectivity for first responders and enhancing disaster recovery capabilities.
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- Loyalty Program Benefits: Starting in July, the new program will offer customers 3% back on bills, usable for new phones or at brands like Sephora and Hilton, which is expected to boost customer retention significantly.
- Market Competition Response: Verizon's 'Simplicity' plan will eliminate network tiers and combine mobility and home services into one bill, strategically positioning itself against AT&T and T-Mobile's bundled offers to increase market share.
- Stable Financial Outlook: Although the specific costs of the new plans were not disclosed, Verizon indicated that these changes are expected to positively impact revenue and will not alter its 2026 financial guidance, reflecting the company's confidence in future growth.
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Verizon Launches Industry-First Customer Loyalty Program
- Customer Loyalty Program: Verizon has launched an industry-first loyalty program that simplifies wireless plans and offers cash back, aiming to attract customers by eliminating complexity and hidden fees, thereby enhancing customer satisfaction and competitive positioning.
- New Plan Introduction: The Verizon Simplicity plan removes network tiers, allowing all customers to enjoy the same 5G service, while the Verizon One plan combines mobility and home services into a single bill, improving user experience.
- Incentive Measures: The new plan offers new and existing customers a 3% cash back in Verizon Dollars every month, along with weekly sweepstakes for prizes like dining vouchers and a chance to watch the World Cup, which not only boosts customer engagement but may also increase loyalty.
- Market Reaction: Despite Verizon's strategy to attract customers through flexible pricing and bundled services, the news has had a limited impact on Verizon's stock price, with rivals AT&T and T-Mobile also showing little movement.
See More
Verizon Prepares for Tropical Storms with Advanced Network Resilience
- Network Resilience Enhancement: Verizon has established a robust network ecosystem with built-in backup power and redundant fiber routes, ensuring critical connectivity during tropical storms, thereby enhancing support for residents and businesses.
- Technological Innovation: The company has implemented Digital Twin Technology, utilizing drone-captured 3D imagery to quickly assess damage post-storm, allowing for prioritized repairs and significantly improving emergency response efficiency.
- Satellite Network Expansion: Verizon's satellite assets have increased to 2,600, with the new Multi-Orbit Off-Road Trailer capable of switching satellites during extreme weather, ensuring 5G connectivity for first responders and enhancing disaster recovery capabilities.
- Community Support Initiative: Verizon is deploying new connectivity vans that provide Wi-Fi and charging stations during crises, aiming to support community recovery efforts in natural disasters, reflecting the company's commitment to public safety.
See More
Yum! Brands Divests Pizza Hut Business in Strategic Move
- Business Sale Announcement: Yum! Brands revealed plans to sell its Pizza Hut business for a total of $2.7 billion, with operations outside Mainland China sold to LongRange Capital for approximately $1.5 billion, expecting about $2.3 billion in net proceeds after taxes, indicating a decisive strategic restructuring.
- Customer-Centric Strategy: Verizon launched an industry-first loyalty program featuring a simplified wireless plan, cash back, and weekly sweepstakes, with CEO Dan Schulman emphasizing a fundamental reshaping of Verizon to focus on customer experience, aiming to simplify services and enhance customer satisfaction.
- Investigation Closure Impact: Delta Air Lines concluded a Department of Transportation investigation into a July 2024 outage without penalties, despite affecting 1.3 million customers and costing $500 million, as the review indicated prompt refunds and adequate support for passengers, mitigating potential reputational damage.
- Layoff Announcement: Robinhood Markets announced a reduction of approximately 10% of its full-time employees to maintain a high-performance culture and accelerate product development, stating this decision is made from a position of business strength, with record average daily trading volumes in June across various markets, showcasing its competitive edge.
See More
Verizon Unveils Simplified Plans to Attract Customers
- Customer Attraction Strategy: Verizon aims to enhance customer appeal by launching simplified plans that eliminate activation and upgrade fees while introducing a new loyalty program, particularly in the fiercely competitive U.S. telecom market.
- Loyalty Program Benefits: Starting in July, the new program will offer customers 3% back on bills, usable for new phones or at brands like Sephora and Hilton, which is expected to boost customer retention significantly.
- Market Competition Response: Verizon's 'Simplicity' plan will eliminate network tiers and combine mobility and home services into one bill, strategically positioning itself against AT&T and T-Mobile's bundled offers to increase market share.
- Stable Financial Outlook: Although the specific costs of the new plans were not disclosed, Verizon indicated that these changes are expected to positively impact revenue and will not alter its 2026 financial guidance, reflecting the company's confidence in future growth.
See More
Apple and Verizon's Cash Flow Advantages
- Cash Flow Stability: Apple generated $129.1 billion in free cash flow over the past twelve months, showcasing its robust cash-generating ability, which not only allows for continuous dividend increases but also provides funding for future growth opportunities.
- Dividend Growth Potential: Apple has raised its quarterly dividend for nearly 15 consecutive years, currently yielding 0.4% annually, while its 5-year annualized dividend growth rate stands at 4.8%, positioning it to potentially become a Dividend Aristocrat and attract long-term investors.
- Verizon's Cash Flow Performance: Verizon generated $20.3 billion in free cash flow over the trailing twelve months, with an impressive annual dividend yield of 6.0%, significantly surpassing the S&P 500, highlighting its appeal among income-focused investors.
- Economic Resilience: The strong cash-generating capabilities of both Apple and Verizon enhance their resilience during economic downturns, enabling them to easily manage debt and continue dividend payments, thereby providing investors with long-term security and potential returns.
See More
SpaceX IPO Sparks Interest in Related Companies
- Intuitive Machines Benefit: Analysts view Intuitive Machines as a beneficiary of SpaceX's IPO, with increasing demand for lunar infrastructure expected to drive a 44% price target increase, following a 69% rise in shares this year.
- Planet Labs Independent Growth: Planet Labs is seen as having no direct competition with SpaceX, although potential overlaps may arise; shares have risen 57%, with a price target of $53 indicating a potential 55% upside.
- Rocket Lab Market Opportunity: As the closest public competitor to SpaceX, Rocket Lab's shares have surged 50% in 2026, with a price target of $129 suggesting a 12% upside, benefiting from heightened market interest due to SpaceX's IPO.
- AST SpaceMobile Competitive Edge: AST SpaceMobile is identified as a direct competitor to Starlink, with analysts noting that Starlink's aggressive strategies could motivate carriers to support AST, leading to an 18% price increase forecast, following a 15% rise this year.
See More
