Verizon: Q4 Beat, Stock Stagnation - A Missed Opportunity?

Verizon Communications Inc. (NYSE: VZ) reported strong operational and financial results for the fourth quarter and full-year 2024, further extending its industry leadership with new products and services that resonated with customers. The company delivered on its 2024 financial guidance, demonstrating strong performance and success across its three priorities of growing wireless service revenue, expanding adjusted EBITDA, and generating strong free cash flow. However, despite the positive results, Verizon's stock price has remained relatively stagnant, presenting a potential missed opportunity for investors.



Verizon's fourth-quarter highlights include:

* Earnings per share (EPS) of $1.18, compared to $(0.64) in the fourth quarter of 2023, and adjusted EPS of $1.10, compared to $1.08 in the same period last year.
* Total operating revenue of $35.7 billion, up 1.6 percent compared to the fourth quarter of 2023.
* Wireless service revenue of $20.0 billion, up 3.1 percent year over year, driven by pricing actions, sales of perks and add-on services, and growth in fixed wireless access.
* Total postpaid phone net additions of 568,000, more than doubling the number of wireless postpaid phone net additions compared to 2023.



Verizon's strong performance in the fourth quarter was driven by several key factors, including wireless service revenue growth, postpaid phone net additions, expansion in broadband market share, and strong capital allocation. The company's strategic focus on growing wireless service revenue, expanding adjusted EBITDA, and generating strong free cash flow positions it for long-term success by driving operational excellence and customer focus.

However, despite the positive results, Verizon's stock price has remained relatively stagnant, presenting a potential missed opportunity for investors. The company's ongoing deployment of its 5G network, built in part on the $53 billion purchase of new C-Band spectrum from the U.S. government, remains a key driver of growth and a sustainable competitive advantage. Additionally, Verizon's acquisitions, such as the pending Frontier acquisition and new satellite partnerships, are expected to enhance its network and expand its customer base, further positioning the company for future growth.

Investors should consider Verizon's strong fundamentals and long-term growth prospects when evaluating the company's stock price. Despite the recent stagnation, Verizon's positive fourth-quarter results and strategic focus on growing wireless service revenue, expanding adjusted EBITDA, and generating strong free cash flow position the company well for long-term success. As such, investors may want to consider Verizon as a potential investment opportunity, despite the recent stock price performance.

Rating: Strong Buy.

Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Please always apply independent thinking and note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.