Verizon's Strategic Shift: Redefining Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Churn Rate Increase: Over the past three years, Verizon's churn rate has risen by 0.25 percentage points, which may seem minor, but each 0.01 percentage point increase corresponds to a loss of 90,000 net additions, resulting in a reduction of about 2.25 million net additions in 2025, highlighting the negative impact of price hikes on customer loyalty.
- Pricing Strategy Shift: CEO Dan Schulman indicated that previous price increases failed to deliver sufficient value to customers, and the company will no longer rely on empty price hikes to drive short-term revenue, instead focusing on winning subscribers and market share, which is a positive signal for investors.
- Future Growth Expectations: While wireless revenue is expected to remain flat in the short term, Verizon anticipates achieving between 750,000 and 1 million postpaid net phone additions in 2026, which is 2 to 3 times the additions in 2025, indicating a foundation for long-term growth.
- Stock Price Rebound: Following months of weakness, Verizon's stock surged 11.81% on Friday as investors welcomed the turnaround strategy; despite a weak wireless revenue forecast, the guidance for postpaid net phone additions instilled market confidence, with the current stock trading at less than 10 times the average analyst estimate for 2026 earnings, presenting an investment opportunity.
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Analyst Views on VZ
Wall Street analysts forecast VZ stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for VZ is 46.42 USD with a low forecast of 43.00 USD and a high forecast of 51.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
4 Buy
10 Hold
0 Sell
Moderate Buy
Current: 39.810
Low
43.00
Averages
46.42
High
51.00
Current: 39.810
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.
Verizon Projects Strong Free Cash Flow Growth for 2026
- Free Cash Flow Growth: Verizon expects its free cash flow to reach $21.5 billion in 2026, up 7% from $20.1 billion in 2025, marking the highest level since 2020 and indicating significant improvement in the company's financial health.
- Earnings Enhancement: The company projects adjusted earnings per share (EPS) between $4.90 and $4.95 for 2026, reflecting a year-over-year growth of 4% to 5%, which signifies a substantial acceleration compared to recent historical performance, boosting investor confidence in future earnings.
- Business Foundation Improvement: Verizon achieved its highest postpaid phone net additions since 2019 in Q4 2025, with wireless services revenue rising 1.1% to $21 billion, indicating a steady recovery of the company's core business.
- Positive Acquisition Progress: Verizon plans to finalize its acquisition of Frontier Communications on January 20, 2026, which is expected to significantly scale its fiber footprint to over 30 million homes and businesses, viewed as a pivotal step in the company's turnaround strategy.
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Verizon's Strategic Shift: Redefining Growth
- Churn Rate Increase: Over the past three years, Verizon's churn rate has risen by 0.25 percentage points, which may seem minor, but each 0.01 percentage point increase corresponds to a loss of 90,000 net additions, resulting in a reduction of about 2.25 million net additions in 2025, highlighting the negative impact of price hikes on customer loyalty.
- Pricing Strategy Shift: CEO Dan Schulman indicated that previous price increases failed to deliver sufficient value to customers, and the company will no longer rely on empty price hikes to drive short-term revenue, instead focusing on winning subscribers and market share, which is a positive signal for investors.
- Future Growth Expectations: While wireless revenue is expected to remain flat in the short term, Verizon anticipates achieving between 750,000 and 1 million postpaid net phone additions in 2026, which is 2 to 3 times the additions in 2025, indicating a foundation for long-term growth.
- Stock Price Rebound: Following months of weakness, Verizon's stock surged 11.81% on Friday as investors welcomed the turnaround strategy; despite a weak wireless revenue forecast, the guidance for postpaid net phone additions instilled market confidence, with the current stock trading at less than 10 times the average analyst estimate for 2026 earnings, presenting an investment opportunity.
Continue Reading