Verizon Communications Inc. (VZ): A Bull Case Theory

We came across a bullish thesis on Verizon Communications Inc. on Phaetrix Investing’s Substack by Phaetrix. In this article, we will summarize the bulls’ thesis on VZ. Verizon Communications Inc.'s share was trading at $39.62 as of January 26th. VZ’s trailing and forward P/E were 8.45 and 8.27 respectively according to Yahoo Finance.

Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. VZ presents itself as a high-yield equity, but in reality, it behaves more like junior telecom debt.

The company is the #2 U.S. wireless carrier and a legacy wireline/fiber provider, generating ~$135 billion in annual revenue split roughly 70/30 between wireless and wireline. While management has stabilized churn, the postpaid subscriber base is no longer growing, and net adds remain negative, leaving wireless as a shrinking business.

The $20 billion Frontier fiber acquisition adds ~2.2 million customers and expands the footprint to 25M+ homes, but it also introduces tighter regulatory constraints, such as California’s 10-year $20/month broadband mandate for low-income users. This means that even if Frontier succeeds, VZ becomes a more regulated utility rather than a growth engine.

Financially, Verizon carries $112 billion in net debt (2.2× net debt/EBITDA) and maintains high capex of $17.5–18.5 billion for 2025, leaving free cash flow of ~$19.5–20.5 billion, which supports a safe 6.7% dividend. Valuation is modest at 8.8× forward P/E and ~5× EV/EBITDA, reflecting the no-growth, high-capex, regulated nature of the business. Even under a perfect bull scenario—wireless stabilizes, Frontier integrates, cost cuts deliver $2.5–3 billion, and interest rates fall—the equity ceiling is 10–11× P/E, implying limited upside and total returns of roughly 8–9% annualized, mostly from yield.

VZ’s risk/reward is unattractive compared to investment-grade credit, which offers 5–5.5% with lower execution and regulatory risk. The stock is highly sensitive to postpaid net adds, Frontier integration progress, and rate moves, and any deterioration in free cash flow or regulatory constraints could trigger a sharp repricing. At $41, Verizon is best treated as a bond proxy rather than growth equity, offering income but no meaningful potential for multiple expansion. The prudent entry range is $35–38, where the yield exceeds 7.2% and downside is better protected.

Previously, we covered a bullish thesis on Verizon Communications Inc. (VZ) by Charly AI in April 2025, which highlighted the company’s 5G, IoT, and fiber growth initiatives, strong cash flow, and attractive 6.13% dividend yield as key drivers for potential upside. VZ’s stock price has depreciated by approximately 6.04% since that coverage due to wireless subscriber stagnation and market concerns over regulatory constraints. Phaetrix shares a similar view but emphasizes the equity’s bond-like characteristics, limited multiple expansion, and regulatory pressures from the Frontier acquisition.

Verizon Communications Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held VZ at the end of the third quarter which was 71 in the previous quarter. While we acknowledge the risk and potential of VZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VZ and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.