Verizon Gains 11% in 3 Months: Should You Invest in VZ Stock Now?

Verizon Communications Inc. VZ has gained 10.5% in the past three months, outperforming the Wireless National industry’s growth of 5.4%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500 composite’s decline of 11.1% and 7.9%, respectively.

Price Performance

It also outperformed its peers, such as Rogers Communications (RCI) and T-Mobile US, Inc. TMUS. Rogers Communications and T-Mobile have declined 5.5% and 0.8%, respectively, over this period. However, AT&T T has gained 13.3% over the same time, exceeding that of Verizon.  

VZ stock gained 1.4% in the last session and closed trading at $44.15, a mere 6.7% down from its 52-week high. Investors are likely to contemplate whether to stay invested or book profits. Let’s dive in to a detailed discussion and asses best course of action for your portfolio.

Key Growth Catalysts for VZ

Verizon is benefiting from significant 5G adoption and fixed wireless broadband momentum with premium unlimited plans. The telecom giant plans to accelerate the availability of its 5G Ultra-Wideband network across the country. The company’s growth strategy includes 5G mobility, nationwide broadband and mobile edge compute and business solutions. The company is on track to set up C-band spectrum at 80–90% of targeted sites by the end of 2025, and roll out 5G Advanced features.

It is offering various mix-and-match pricing in both wireless and home broadband plans, which has led to solid customer additions. In the last reported quarter, VZ recorded consolidated retail prepaid net additions of 137,000, the best since the TracFone acquisition.

Last month, VZ announced a three-year price lock guarantee for all its myPlan and myHome network plans. This ensures that the core monthly plan price for calling, data, and texting will not change in the next three-year period, excluding taxes, fees and perks. The hassle-free enrollment for the changeover is being done automatically for all existing users and is reset for the next three years each time myPlan is changed.

The customer-first strategy is designed to woo new customers and retain existing ones amid a challenging macroeconomic environment. Verizon guarantees a free phone from Apple, Google, or Samsung with any myPlan enrollment when users trade in any phone in any condition. Home Internet routers are included at no additional cost with every myHome plan. VZ noted that it had over 10 million perk subscriptions at the end of the first quarter of 2025 and forecasts 15 million subscriptions for the platform by the end of 2025.

Strategic broadband expansion bodes well. Verizon added 339,000 broadband net additions in the first quarter of 2025, driven by both Fios and Fixed Wireless Access offerings. VZ expects momentum in Fixed Wireless Access products to continue to drive the broadband growth. It expects to achieve 8 to 9 million Fixed Wireless Access subscribers by 2028. The company is also now ahead of its goal on its plan to deliver 650,000 incremental Fios passings in 2025.  The pending acquisition of Frontier will further aid in strengthening this business for VZ.

Moreover, in the enterprise and wholesale business, Verizon is shifting its revenue mix toward newer growth services like cloud, security and professional services. In the business segment, Verizon closed more than a dozen private network deals in the first quarter, including with AdventHealth and Nucor.

Despite macroeconomic uncertainty amid tariff troubles and declines in consumer confidence, management reaffirmed confidence in achieving its 2025 financial guidance.

Challenges Remain for VZ

The company’s wireline division is struggling with persistent losses in access lines due to competitive pressure from voice-over-Internet-protocol service providers and aggressive triple-play (voice, data, video) offerings by the cable companies.

Verizon operates in an intensely competitive wireless market where price wars and aggressive promotions remain the norm. To expand its customer base, it is spending heavily on promotion and offering lucrative discounts, which are hurting margins.

The company recorded high capital expenditures in order to support the launch and continued build-out of its 5G Ultra Wideband network, deployment of significant fiber assets across the country, and upgrade to Intelligent Edge Network architecture. It remains unclear if and when a reasonable return can be achieved from such investments. VZ expects adjusted earnings to grow 0-3% range, with a cash flow of $35-$37 billion, on capital expenditures of $17.5-$18.5 billion.

Given the uncertainty, analysts have kept their estimates unchanged for the current year but have revised them downwards for the current and the next quarter. The negative estimate revision depicts bearish sentiments for the stock.

Key Valuation Metric

From a valuation standpoint, VZ appears to be trading relatively cheaper than the Wireless National industry but well above its mean. Going by the price/earnings ratio, the company shares currently trade at 9.3 forward earnings, lower than 14.10 for the industry but well above the stock’s mean of 8.88. 

In comparison, AT&T, T-Mobile and Rogers Communications are trading at PE multiples of 13.21, 22.64, and 7.28, respectively. 

End Note

By investing steadily in infrastructure and pioneering new technologies, Verizon is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. The innovative industry-first three-year price lock strategy is expected to be a lucrative offer for customers.

However, a saturated wireless market and price wars owing to competitive pressure have eroded its profitability. The guaranteed price lock is expected to squeeze margins further.

VZ carries a Zacks Rank #3 (Hold) at present, which implies investors should wait for a more favorable entry point to accumulate the stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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