Verizon Gains 9.2% YTD: Should You Invest in VZ Stock Now?

Verizon Communications Inc. VZ has gained 9.2% in the year-to-date period compared with the Wireless National industry’s growth of 13.5%. The stock has outperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.Image Source: Zacks Investment ResearchThe company has underperformed its peers like AT&T Inc. T and T-Mobile US, Inc. TMUS. Shares of AT&T have gained 26.8%, while T-Mobile shares have returned 9.4% during this period.VZ Rides on 5G Adoption, Customer-Focused Strategy & AI FocusVerizon is benefiting from significant 5G adoption and fixed wireless broadband momentum. The company is accelerating the availability of its 5G Ultra-Wideband network across the country. Its 5G mobility services offer impressive connectivity and are gaining prominence across various industries, such as public safety, health care, retail and sports. To unlock the full potential of next-generation wireless technology Verizon’s 5G relies on three fundamental drivers. These include massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources and the ability to deploy a large number of small cells.The company recently secured a multibillion-dollar contract to deploy a private 5G network to industrial campuses across the Thames Freeport. This is one of the busiest maritime logistics and manufacturing regions in the United Kingdom. Such customer wins serve as a testament to Verizon’s industry-leading 5G capabilities.The company also recently introduced several AI native features to enhance customer service. One of the standout features is Verizon Customer Champion, which utilizes Google Cloud’s AI, including Google’s Gemini models, to swiftly provide complete resolution to end users. The company is also offering 24/7 live customer support. It has refined the Verizon APP and introduced several AI features to improve transparency and drive greater value to end users from Verizon’s services. Such initiatives are expected to boost customer engagement in the upcoming quarters.Verizon Complete Business Bundle solution is also gaining popularity among small businesses. With reliable, plug-and-play Internet connectivity, desk phone and security solutions with 24/7 tech support, these solutions enable the digital transformation of small business entities. The company has significantly augmented its retail footprint over the past few years. 93% of Americans now live within 30 minutes of a Verizon store. Verizon’s presence across several regions allows the company to run localized promotions and improve real-time customer support services.Key Challenges for VerizonVerizon operates in a competitive and almost saturated U.S. wireless market with incumbents like AT&T and T-Mobile. Intensifying competition with a relatively fixed pool of customers is putting pressure on pricing. It could limit the company’s ability to attract and retain customers and may adversely affect its operating and financial results.In a bid to increase customer base and beat the competition, Verizon often spends heavily on promotion and offers lucrative discounts. This puts pressure on the margin. The company has also heavily invested in the C-band auction, which is offering airwaves in the 3.7 gigahertz-to-4.2 gigahertz area of spectrum to acquire key mid-band spectrum for potential 5G deployments in the next few years. Unless the high auctioning expenses are justified, margins are likely to be compromised significantly.Estimate Revision Trend of VZEarnings estimates for 2025 have remained stable at $4.69 over the past 60 days, while the same for 2026 has improved 0.41% to $4.88.Image Source: Zacks Investment ResearchKey Valuation Metric of VZFrom a valuation standpoint, VZ appears to be trading relatively cheaper compared to the industry but trading above its mean. Going by the price/earnings ratio, the company’s shares currently trade at 9.13 forward earnings, lower than 13.74 for the industry but above the stock’s mean of 8.96.Image Source: Zacks Investment ResearchEnd NoteWith one of the most robust network infrastructures, Verizon continues to bring state-of-the-art technologies to provide ultra-fast data speed and capacity to customers. Client-focused planning, strong retail presence, AI integration, disciplined engineering and constant strategic investment are major growth drivers. The multi-billion-dollar deal in the United Kingdom highlights growing traction in the international market as well.However, intense competition in the wireless industry continues to hinder revenue growth. The entry of cable multi-service operators has further intensified the competition. Weakness in the wireline business and macroeconomic challenges are headwinds. With a Zacks Rank #3 (Hold), VZ appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks