Verizon Stock Before Q4 Earnings: A Sensible Buy or Risky Move?

Verizon Communications Inc. VZ is scheduled to report fourth-quarter 2025 earnings on Jan. 30, 2026. The Zacks Consensus Estimate for sales and earnings is pegged at $35.94 billion and $1.06 per share, respectively. Earnings estimates for VZ have declined marginally from $4.70 per share to $4.68 for 2025 and from $4.85 per share to $4.81 for 2026 over the past 60 days, owing to a challenging macroeconomic environment.VZ Estimate TrendImage Source: Zacks Investment ResearchEarnings Surprise HistoryThe communication services provider has a solid trailing four-quarter earnings surprise history, having exceeded expectations on each occasion. It delivered a four-quarter earnings surprise of 2.37%, on average. In the last reported quarter, the company pulled off an earnings surprise of 1.68%. Image Source: Zacks Investment ResearchEarnings WhispersOur proven model predicts an earnings beat for Verizon for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. Verizon currently has an ESP of -1.99% with a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping Upcoming ResultsVerizon is offering various mix-and-match pricing in wireless and home broadband plans, which have historically led to increased adoption of 5G devices and premium unlimited plans. In addition to various bundle plans for varied streaming services, it offers customers greater control and flexibility over their preferred content selections, allowing them to pay only for what they want. During the to-be-reported quarter, Verizon launched 5G Network Slice - Enhanced Internet. This leading-edge fixed wireless Internet solution gives customers supercharged uplink capacity and high performance with no data caps. Verizon’s new 5G network slicing product offers 200 Mbps downlink and 45 Mbps uplink speed, ensuring reliable data transmission for AI inference models, computer vision and machine learning applications. Consistent connectivity and high throughput effectively support cloud-based applications and large file transfer in real time. This is likely to have translated into healthy customer additions and higher revenues from the Consumer segment. During the reported quarter, Verizon completed the deployment of a 100G dedicated optical ring at Monumental Sports & Entertainment (MSE). The optical ring connects four key sites of MSE with ultra-high bandwidth, seamless integration across venues, strong network connectivity and faster and reliable broadcast workflow. It will act as the backbone of the core broadcast and content creation process of MSE, significantly boosting network resiliency and optimizing operations ahead of the 2025–26 NHL/NBA seasons. These are likely to have translated into incremental revenues in the Business segment.However, adverse foreign currency translations, infrastructure investments and high operating costs for 5G deployments are likely to have led to soft margins in the quarter. Verizon has announced a three-year price lock guarantee for all its myPlan and myHome network plans. This ensures that the core monthly plan price for calling, data and texting will not change in the next three-year period, excluding taxes, fees and perks. Although this customer-centric model will entice new customers, the promotional offers and lucrative discounts are expected to have weighed on margins. In addition, the company’s wireline division is struggling with persistent losses in access lines owing to competitive pressure from the voice-over-Internet protocol (VoIP) service providers and aggressive triple-play (voice, data and video) offerings by cable companies. Verizon also recorded high capital expenditures for the launch and continued build-out of its 5G Ultra-Wideband network, deployment of significant fiber assets across the country and Intelligent Edge Network architecture upgrades.Price PerformanceOver the past year, VZ has lost 2% compared with the industry’s decline of 9.4%. It has outperformed its peers like AT&T Inc. T and T-Mobile US Inc. TMUS over this period. While AT&T declined 3.8%, T-Mobile was down 15%.One-Year VZ Stock Price PerformanceImage Source: Zacks Investment ResearchKey Valuation MetricFrom a valuation standpoint, Verizon appears attractive relative to the industry and is trading below its mean. Going by the price/earnings ratio, the company shares currently trade at 8.2 forward earnings, lower than 11.14 for the industry and the stock’s mean of 8.81. Image Source: Zacks Investment ResearchInvestment ConsiderationsBy investing steadily in fiber infrastructure and pioneering new technologies, Verizon is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. This is likely to translate into solid subscriber growth, higher average revenue per user and increased broadband and fiber penetration. However, high capital expenditures due to the continued expansion of 5G mmWave in new and existing markets, the densification of the 4G LTE wireless network and the deployment of the fiber infrastructure are likely to have eroded margins. An ongoing shift from traditional linear video to over-the-top offerings, along with a competitive and almost saturated U.S. wireless market, is expected to weigh on the company’s revenues in the future. Moreover, Verizon is likely to be affected by the demand softness in the Business Segment.End NoteVerizon’s effective customer-focused strategy, combined with a strong 5G network, is driving momentum in the wireless vertical. However, intense competition and weakness in the Business segment are concerns. Macroeconomic challenges remain a drag. With declining earnings estimates, the stock is witnessing a negative investor perception. Consequently, it might not be prudent to bet on the stock at the moment.However, a single quarter’s results are not so important for long-term stakeholders, and investors already owning the stock could stay put. In addition, an attractive valuation and focus on the deployment of a cloud-native, container-based, virtualized architecture for higher flexibility, scalability and cost efficiency across its network will benefit it in the long term.Just Released: Zacks Top 10 Stocks for 2026Hurry – you can still get in early on our 10 top tickers for 2026. 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