Verizon Communications (VZ) just joined forces with AT&T and T-Mobile in a new joint venture that targets wireless coverage gaps in underserved U.S. regions, putting satellite-supported connectivity directly into the long-term story for the stock.
Verizon Communications has seen its share price gain 8.36% over the past 90 days and 12.96% year to date to US$45.77. The 1-year total shareholder return of 18.33% and very large 3-year total shareholder return point to momentum that recent joint ventures and content renewals help keep in focus, even after an 8.72% decline over the last 30 days.
Capitalize on Verizon Communications’ push into wider coverage by scanning a curated group of 43 power grid technology and infrastructure stocks.After that sharp multi year total return, plus a fresh coverage JV in the mix, the real puzzle now is simple: Is Verizon Communications still pricing in meaningful upside, or has most of the rerating already happened?
Most Popular Narrative: 9% Undervalued
Verizon Communications last closed at $45.77, while the most followed narrative on the stock pegs fair value closer to $50.50. That gap frames the current debate about whether recent network moves and steady earnings forecasts justify a modest valuation cushion.
I was looking for a large-cap company for diversification in my portfolio that has the strength to grow in the coming years. Furthermore, the debt-to-equity ratio must remain responsible or under control. The PEG (around or >1) and EPS (>1) ratios must be good, as well as the payout ratio (<75%), and the company must pay dividends, which I would prefer to see grow somewhat annually.
See why 36 investors see Verizon Communications as 9% undervalued.
Result: Fair Value of $50.50 (UNDERVALUED)
Still, the recent 8.72% pullback and the very large 3-year total return leave Verizon Communications exposed if sentiment turns on telecom valuations or concerns about capital intensity.
Find out about the key risks to this Verizon Communications narrative.
Next Steps
Sentiment on Verizon Communications sits somewhere between cautious and curious. Move quickly, review the underlying data, and weigh both sides of the story with the 3 key rewards and 1 important warning sign.
Looking for more Verizon Communications sized ideas?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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