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Verizon Communications Inc. VZ is scheduled to report third-quarter 2025 earnings on Oct. 29. The Zacks Consensus Estimate for sales and earnings is pegged at $34.18 billion and $1.19 per share, respectively. Earnings estimates for VZ have declined marginally from $4.70 per share to $4.69 for 2025, and decreased from $4.94 per share to $4.92 for 2026 over the past 30 days.
The communication services provider has a solid trailing four-quarter earnings surprise history, having exceeded expectations on each occasion. It delivered a four-quarter earnings surprise of 2.16%, on average. In the last reported quarter, the company pulled off an earnings surprise of 3.39%.
Our proven model does not conclusively predict an earnings beat for Verizon for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. That is not the case here.
Verizon currently has an ESP of -1.51% with a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
During the quarter, Verizon introduced several tailored plans to expand its customer reach across different segments of the Internet user base. In Florida, which consists of a vibrant senior population, Verizon has introduced a new 55+ plan in the state at affordable rates, 24/7 tech support and emergency satellite messaging features. However, the company is set to face stiff competition from AT&T, Inc. T and T-Mobile US, Inc. TMUS. T and TMUS have also introduced wireless plans with enticing features tailored for people aged 55 and above.
The company has also introduced Tracfone Freedom with its leading prepaid brand, Tracfone Wireless. The plan offers unlimited talk time, text and data for $45 per month with Auto-pay. Backed by Verizon's comprehensive 5G network, the plan comes with built-in spam and fraud protection features. It also includes international connectivity for calling, texting and roaming in Canada & Mexico and an additional 10% discount for military members and veterans. Verizon’s offering of mix and match pricing plans in both wireless and home broadband has led to strong customer additions.
In the quarter under review, the Tampa Police Department has formed a partnership with Verizon Frontline. Verizon Frontline is set to deploy and activate around 950 5G Ultra-Wideband-enabled smartphones, significantly upgrading the mission-critical communication infrastructure of the police department.
In the to be reported quarter, Verizon Business has deployed advanced converged network (Wi-Fi) services at the National Hockey League team St. Louis Blues’ stadium, Enterprise Center. Verizon Business is witnessing weak demand trends. However, customer wins like this are expected to partially reverse this declining trend.
The Zacks Consensus Estimate for revenues from the Consumer segment is pegged at $26.23 billion, while our model projects revenues of $26.01 billion. The Zacks Consensus Estimate for revenues from the Business segment is pegged at $7.28 billion, while our model projects revenues of $7.29 billion.
Over the past year, VZ has declined 6.1% against the industry’s decline of 2.1%. It has also underperformed its peers like AT&T and T-Mobile over this period. While AT&T gained 14.5%, T-Mobile was down 3.9%.
From a valuation standpoint, Verizon appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 7.96 forward earnings, lower than 12.01 for the industry and the stock’s mean of 8.95.
Verizon has been gaining solid traction in the Consumer segment, backed by some major growth drivers. It is steadily building the entire network infrastructure and ecosystem to provide the most amazing 5G experience to customers. The company has witnessed increased adoption of 5G devices and premium unlimited plans. Verizon’s customer segmentation strategy, which categorizes different client groups, helps it deliver tailored solutions to different sectors. Such personalized offerings help in client retention and drive average revenue per account growth.
However, it is affected by weakness in the Business Segment, which primarily includes the wireless and wireline operations of wholesale, public sector and other small and medium businesses. Demand softness in the public sector business will continue to impact Verizon’s Business segment in the second half of 2025 as well.
The company’s effort to diversify its revenue stream by venturing into new markets such as public safety and the automotive domain is positive. However, stiff competition in its primary revenue drivers, which are 5G and broadband, is still hindering the top line growth.In a bid to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts, which are weighing on margins.
VZ’s effective customer-focused strategy, combined with a strong 5G network, is driving momentum in the wireless vertical. However, intense competition and weakness in the business segment are concerns. Macroeconomic challenges remain a concern. Downtrend in estimate revision highlights dwindling investors' confidence about the stocks growth potential. Verizon currently carries a Zacks Rank 4, hence, investors should be better off if they avoid investing in this stock.
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This article originally published on Zacks Investment Research (zacks.com).
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