Verizon (VZ) After Earnings: Cheap Stock or Value Trap?

Fahad Saleem

Wed, July 29, 2026 astatine 9:25 AM CDT 4 min read

Verizon Communications (NYSE:VZ) jumped precocious aft posting earnings. Profit bushed estimates and roseate twelvemonth implicit year, but gross missed estimates.

The banal inactive trades astatine a discount to peers, nether 9.5 times guardant net versus astir 13x for the group. The question is whether that discount is simply a acquisition oregon a informing sign.

The Bull Case

Verizon conscionable posted a beardown 4th for postpaid telephone nett additions successful 5 years, beating expert expectations by a wide margin. Broadband adds stayed beardown crossed fixed wireless and fiber. Adjusted EBITDA deed a record, up 7.2%, pushing margins to an all-time precocious supra 40%.

Management raised full-year guidance for the 2nd consecutive quarter. EPS maturation is present guided to 6-7%, and escaped currency travel maturation guidance got bumped to 9-10% from 7% previously. That's a meaningful acceleration from the debased single-digit escaped currency travel maturation Verizon posted the past fewer years.

The dividend looks safe. Free currency travel payout ratio sits nether fractional of what the institution generates, and the astir 6% output comes with a multi-year streak of yearly hikes. Buybacks adhd different furniture of shareholder return: the institution is already up of gait for the year, and absorption conscionable raised the full-year people further.

Starlink Threat?

Bulls besides reason the Starlink menace is overstated. Satellite beams screen wide areas adjacent astatine debased speeds, and signals conflict indoors, truthful a existent terrestrial buildout inactive requires towers and fiber. Bulls accidental outer exertion can't regenerate what Verizon and AT&T bash due to the fact that sum and reliability conscionable don't standard the aforesaid mode from orbit.

There's besides a slower-moving tailwind. The planetary telecom marketplace is projected to astir treble implicit the adjacent 9 years, increasing astatine a mid-single-digit-to-high-single-digit yearly clip. Verizon's standard means it captures a chunk of that conscionable by holding share. On apical of that, caller AI-driven fibre deals are emerging — Verizon announced a sizable multiyear statement with Google to link information centers, with much deals reportedly successful the pipeline.

The Bear Case

The maturation communicative has limits. Total gross inactive fell, driven by anemic instrumentality income arsenic customers clasp onto phones longer and Verizon pulls backmost connected instrumentality subsidies. Core mobility and broadband work gross grew conscionable 2.8%, decent but not the benignant of fig that closes a decade-long spread with the market.

That spread is real. Verizon has returned astir fractional its dividend output successful full banal show implicit the past 10 years, portion the S&P 500 gained implicit 300% successful the aforesaid stretch.