Can Verizon's Business Segment Portfolio Generate Future Profit?

Verizon Communications Inc.’s VZ Business segment has faced a steady decline in recent years, as revenue growth from enterprise and government services has slowed. This slowdown has made it more challenging for the company to sustain growth in this segment.

In the latest quarter, Verizon’s business segment revenues declined to $7.4 billion, down from $7.5 billion in the same period last year. This decline is due to several factors, including strong competition from telecom, cloud and networking providers, rising operational costs and a shift by customers toward more flexible, cloud-based solutions, all of which are putting pressure on profitability.

Verizon has introduced several products to strengthen its enterprise offerings. The 5G Network Slice provides faster, prioritized 5G connectivity for businesses, while Trusted Connection adds network-native cybersecurity. Additionally, the Inseego FX4210 5G router in Verizon’s Fixed Wireless Access portfolio improves connectivity and simplifies network management for corporate clients.

The company's business segment is expected to grow in the near future as demand for 5G, IoT, cloud networking and cybersecurity increases. By expanding the 5G network, upgrading fiber infrastructure and offering AI and enterprise solutions, Verizon aims to attract more corporate and government clients. These initiatives are expected to enhance revenues, diversify offerings and make the Business segment a key driver for innovation and profitable for the company.

How Are Competitors Faring?

Verizon faces stiff competition from AT&T, Inc. T and T-Mobile, US, Inc. TMUS. AT&T is expanding its 5G network and IoT solutions to provide faster, more connected services for businesses and consumers. It is also investing in cloud networking and cybersecurity to help companies securely manage data and digital operations. AT&T, Cisco and Nvidia are working together to combine networking, edge computing, and AI infrastructure to enable real-time data processing closer to where it is generated.

TMUS has launched Edge Control and T Platform, 5G Advanced networks that help businesses connect securely with less time and easier management. It is expanding its IoT network by connecting devices, vehicles and smart systems for real-time data and automation. TMUS is enhancing business security with zero-trust tools and Secure Access Service Edge solutions.

VZ’s Price Performance, Valuation & Estimates

Verizon has gained 14.8% over the past year against the industry’s decline of 5.9%.

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Going by the price/earnings ratio, the company’s shares currently trade at 10.02, lower than the 13.06 for the industry.

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VZ’s earnings estimates for 2026 have increased 2.1% to $4.91 per share, while the same for 2027 have increased 4% to $5.26 over the past 60 days.

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Verizon currently carries a Zacks Rank #3 (Hold). 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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