Verizon Communications: A Buy Rating After Earnings Report

Verizon Communications Inc. (NYSE:VZ) remains a buy post-earnings, as its fundamentals are mixed but valuation is fair. The core reason for the bullish call is due to its strong wireless business, which is expected to drive growth. Verizon's earnings per share beat expectations, and its revenue increased by 2.9%. The company's focus on 5G and fiber-optic network expansion is also a positive factor. Despite the mixed fundamentals, Verizon's valuation is fair, making it a good investment option.

Verizon Communications Inc. (NYSE:VZ) continues to be a favorable investment option despite mixed fundamentals, according to recent earnings reports. The company's earnings per share (EPS) exceeded expectations, and revenue increased by 2.9% [1]. The core driver behind the bullish call is Verizon's robust wireless business, which is projected to fuel growth in the coming quarters. Additionally, the company's focus on 5G and fiber-optic network expansion is seen as a positive factor.

Verizon's wireless business, which includes its 5G network, has been a significant growth driver. In Q2 2025, the company added 293,000 broadband subscribers and grew its fixed wireless access base to over 5.1 million, targeting 8 to 9 million by 2028 [1]. The company's commitment to expanding its Fios fiber network, with plans to add 650,000 new passings this year, further underscores its long-term strategy [1]. Verizon is also leveraging AI to enhance customer service and retention, with its AI-powered Customer Champion using Google Cloud’s Gemini models to improve support speed and quality [1].

Internationally, Verizon secured a multibillion-dollar contract to deploy a private 5G network at the Thames Freeport industrial zone in the UK, expanding its global 5G presence [1]. The company's plans to open a new Manhattan headquarters in 2026, consolidating corporate functions and supporting growth with around 1,000 employees, also demonstrate its commitment to growth and operational efficiency [1].

Despite these positive developments, Verizon's valuation is considered fair, making it a good investment option. The company's mobile and broadband businesses generate substantial recurring revenue, providing funds to expand its 5G and fiber networks and support its high-yielding dividend [2]. Verizon expects to generate $17.5 billion to $18.5 billion in free cash flow this year, which is sufficient to cover its roughly $11 billion annual dividend payout [2]. The company's strong balance sheet and solid cash flow position it well to continue increasing its dividend and make strategic acquisitions when opportunities arise [2].

In conclusion, while Verizon Communications Inc. (NYSE:VZ) has mixed fundamentals, its strong wireless business and focus on 5G and fiber-optic network expansion make it a promising investment. The company's fair valuation and robust financial position further support its potential as a good long-term investment option.

References:

[1] https://finance.yahoo.com/news/verizon-communications-inc-vz-adds-151510808.html
[2] https://www.spokesman.com/stories/2025/aug/03/the-motley-fool-verizon-communications-for-income/