Verizon's Q1 Earnings Crossroads: Can Momentum Overcome Headwinds?

Verizon (VZ) is set to report its first-quarter 2025 earnings on April 22, marking a pivotal moment for the telecom giant as it navigates a landscape of modest growth expectations and investor skepticism. With analysts forecasting a flat $1.15 EPS compared to the year-ago period, the focus will be on whether Verizon can sustain its streak of earnings outperformance while addressing persistent revenue challenges. Here’s what investors need to watch for in the coming week.

Key Financial Metrics: The EPS Reliability vs. Revenue Struggles

Verizon’s earnings consistency has been a standout feature in recent quarters. Over the past four quarters, the company has beaten EPS estimates each time, including a $1.10 EPS in Q4 2024 that narrowly topped forecasts. Analysts expect this trend to continue in Q1 2025, with the $1.15 EPS estimate aligning with the prior-year quarter. This stability contrasts sharply with its revenue performance, where mixed results have been the norm.

The Q1 revenue forecast of $33.33 billion represents a modest 1.1% year-over-year increase, but this follows a Q4 2024 beat of 0.9%—a rare bright spot. However, Verizon has missed revenue estimates in six of the past 24 quarters, underscoring volatility. Investors will scrutinize whether this quarter’s top-line growth holds steady or slips further. A would highlight this inconsistency.

Analyst Outlook: A Split Between Caution and Optimism

Analysts remain divided on Verizon’s trajectory. The stock carries a “Moderate Buy” rating overall, with 25 analysts weighing in. While Goldman Sachs and Cowen have reaffirmed “Buy” ratings, Tigress Financial’s “Underperform” call reflects lingering concerns about valuation and sector competition. The median price target of $49.00 suggests upside potential from current levels (~$44.30 at time of writing), but UBS’s $44.00 target highlights the risks. A would illustrate its underperformance relative to peers.

Industry Context: A Telecom Tale of Two Trends

Verizon’s wireless service revenue—a key growth lever—has expanded for an impressive 18 consecutive quarters sequentially. This reflects demand for 5G and premium wireless plans, which have offset slower equipment sales. However, broader economic factors loom: generative AI’s rise is reshaping corporate IT budgets, potentially diverting spending from traditional telecom infrastructure. Meanwhile, peer companies like Nike and Levi’s have shown that even established brands face headwinds in a cautious consumer environment.

The telecom sector itself is in flux. Verizon’s $134.8B in 2024 revenue underscores its dominance, but competitors like AT&T and T-Mobile are aggressively courting customers with low-cost plans. Verizon’s ability to retain high-margin service contracts while expanding broadband and security solutions—highlighted in its 2025 strategy—will be critical to sustaining growth.

Strategic Crossroads: Beyond the Numbers

Beyond the earnings report, investors will look for clues about Verizon’s long-term bets. Management’s commentary on 5G expansion, fiber-optic deployment, and cybersecurity services could signal whether the company is adapting to tech-driven trends. A would clarify where the company is allocating resources.

Conclusion: A Balancing Act for Verizon

Verizon’s Q1 results will test its ability to reconcile two narratives: its reliable earnings engine versus its uneven revenue growth. The EPS forecast is a low bar, but missing it could spark a sell-off. Revenue, however, must show resilience to justify the $49.00 median price target. With 18 quarters of service revenue growth, Verizon has a strong foundation, but its stock’s underperformance versus the XLC fund ($108.50 to $112.30 price drop in the past year) suggests investors are waiting for clearer proof of future dominance.

If Verizon can deliver sequential service revenue gains, affirm strategic investments in broadband and security, and maintain its EPS track record, it could regain momentum. Failure to address revenue volatility, however, risks prolonging the stock’s stagnation. For now, Verizon’s earnings report is a litmus test for whether its steady-as-she-goes strategy can outpace a sector in flux. Investors would be wise to watch the margins and management’s vision closely—both are keys to unlocking the $52.00 upside Goldman Sachs envisions.