Verizon Rises 9.5% Year to Date: Should You Invest in VZ Stock Now?

Verizon Communications Inc. VZ has gained 9.5% in the year-to-date period compared with the Wireless National industry’s growth of 15.9%. The stock has underperformed the Zacks Computer & Technology sector and the S&P 500 during the same time frame.Image Source: Zacks Investment ResearchShares of the company have underperformed its peers like AT&T Inc. T and T-Mobile US, Inc. TMUS. Shares of AT&T and T-Mobile have returned 27.7% and 15.9%, respectively, during this period.VZ Gains on Customer-Focused Approach, Fiber ExpansionVerizon is offering various mix-and-match pricing in both wireless and home broadband plans, which has led to solid customer additions. The company recently introduced Verizon Family Plus with enticing features. With just $10/month, subscribers get access to a wide range of services that cater to digital wellness and safety tools for all the family members. The plan includes content filters, screen time controls allowing parents to take control of device usage of children. It also comes with driving insights for teens, unlimited location check-ins, roadside assistance and other tailored features for elderly members of the family. Verizon also recently launched Tracfone Freedom, its first unlimited talk, text and data plan at $45 per month with Auto-pay. The plan provides 5G access, fraud protection capabilities. It offers a discount to military and veterans. The plan comes with international connectivity for calling, texting and roaming in Canada & Mexico and flexible 3, 6, 12-month variants.Verizon is aggressively forging ahead to expand its fiber optics networks to support 4G LTE and 5G wireless standards, as well as wireline connections. In the second quarter, the company secured the FCC’s approval for its acquisition of Frontier Communications. The buyout has significantly augmented the company’s fiber infrastructure footprint nationwide. The company is also making necessary capital expenditures due to the continued expansion of 5G mmWave in new and existing markets, and the densification of the 4G LTE wireless network to cater to huge traffic demands across multiple verticals.Major Challenges for VerizonVerizon faces stiff competition from major industry leaders AT&T and T-Mobile in all the verticals in which it operates. AT&T has launched new wireless plans with enticing features tailored for people aged 55 and above. By opting for the plan, customers can get one line for $40/month or two lines for $35/month with unlimited talk, text and data. T-Mobile offers unlimited talk and text at $40 per month with Autopay for its basic mobile plan. With a five-year price guarantee, it offers 15GB of premium data. Hence, with T and TMUS also rolling out enticing offerings, acquiring customers in a highly saturated market won’t be easy for Verizon.In a bid to expand its customer base, Verizon is spending heavily on promotion and is also offering lucrative discounts. Although the customer-first strategy is designed to woo new customers and retain existing ones, it is likely to strain margins. Macroeconomic challenges continue to impact net sales in its Business segment.Image Source: Zacks Investment ResearchEstimate Revision Trend of VZEarnings estimates for 2025 have increased 0.21% to $4.7 over the past 60 days, while the same for 2026 has improved 0.41% to $4.94.Image Source: Zacks Investment ResearchKey Valuation Metric of VZFrom a valuation standpoint, VZ appears to be trading relatively cheaper compared to the industry. Going by the price/earnings ratio, the company’s shares currently trade at 9.01 forward earnings, lower than 13.7 for the industry.Image Source: Zacks Investment ResearchEnd NoteVerizon’s multi-dimensional approach and customer-focused strategies are driving growth in the Consumer segment. AI advancements and the growing adoption of IoT devices are driving demand for high-speed connectivity. Verizon is swiftly expanding its fiber network and enhancing its 4G LTE and 5G infrastructure to meet the emerging requirements. Such initiative bodes well for sustainable growth.However, fierce competition in the U.S. wireless market limits growth potential. Weakness in some verticals stemming from macroeconomic challenges remains a major concern. 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.Higher. Faster. Sooner. Buy These Stocks NowA small number of stocks are primed for a breakout, and you have a chance to get in before they take off.At any given time, there are only 220 Zacks Rank #1 Strong Buys. On average, this list more than doubles the S&P 500. We’ve combed through the latest Strong Buys and selected 7 compelling companies likely to jump sooner and climb higher than any other stock you could buy this month.You'll learn everything you need to know about these exciting trades in our brand-new Special Report, 7 Best Stocks for the Next 30 Days.Download the report free now >>Want 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