Upside to Verizon from Higher Subscriber Share

+1.60%
Upside
41.87
Market
42.54
Trefis
VZ: Verizon logo
VZ
Verizon

Mobile Phones & Plans constitute around 50% of the $34 Trefis price estimate for Verizon’s (NYSE:VZ) stock, which is currently about 8% above the current market price of $31.  There could be additional upside to Verizon if the company is able to gain subscriber share from rivals Sprint Nextel (NYSE:S) and AT&T (NYSE:T).

We estimate that Verizon’s market share in US monthly mobile subscribers has increased from around 23.5% in 2005 to around 30% in 2009 [1]. Verizon’s subscribers typically include retail customers opting for postpaid plans that come with a 1-2 year contract period.

Relevant Articles
  1. Up 8% Year To Date As 5G Gains Traction, What’s Next For Verizon Stock?
  2. Up 25% Over The Last Three Months, Will Verizon See Further Gains Following Q4 Results?
  3. Down 50% From Covid Highs, Will Verizon Stock Recover Post Q3 Results?
  4. Will Verizon Stock Recover To Its Pre-Inflation Shock Highs?
  5. Verizon Stock Has Over 60% Upside If It Recovers To Its Pre-Inflation Shock Highs
  6. Will Verizon’s Postpaid Woes Continue In Q1?

The acquisition of Alltel in January 2009 will help Verizon expand its network coverage to most parts of the US.  We expect that Verizon will continue to gain share as its smartphone portfolio improves and as subscribers continue to transition from feature phones to smartphones.  The eventual end of AT&T’s iPhone exclusivity is also expected to benefit Verizon share.

The average of Trefis member forecasts for Verizon Share of Monthly Mobile Subscribers indicate an increase from 33.5% in 2010 to around 40% by 2016, compared to the baseline Trefis estimate of an increase from 31% in 2010 to close to 35% by the end of the Trefis forecast period. The member estimates imply an upside of 6% to the Trefis price estimate for Verizon’s stock.

You can drag the forecast trend-line above to express your own view, and see the sensitivity of Verizon’s stock to Verizon Share of Monthly Mobile Subscribers.

Our complete analysis for Verizon’s stock is here.

Notes:
1. Verizon market share of monthly mobile subscribers is calculated as = Verizon Postpaid Retail Subscribers / US Cellular Customers. Verizon reports the number of postpaid retail subscribers in its SEC filings. Data on US cellular customers is obtained from CTIA Wireless Industry Survey.