The Number That Could Keep Verizon Communications Stock Climbing

A falling churn rate is quietly doing more for Verizon than any headline contract, and it is why management keeps raising its own guidance.

The Stock Paused While The Business Sped Up

Verizon Communications (VZ) stock has returned about 24% over the past six months and trades around 5% below its 52-week high. The odd part is the past three months, when it returned just 1.7% against 2.5% for the S&P 500. The stock went quiet in exactly the stretch when the operating numbers did the opposite.

The Churn Number Behind The Guidance Raises

Consumer postpaid phone churn ran 95 basis points in the fourth quarter of 2025, 90 basis points in the first quarter of 2026, and 84 basis points in the second. That reverses several years of churn pushing the other way, and it rewrites the economics of every customer added. Management, hardly a neutral witness, calls it a step change.

The part that gets missed: Verizon is adding more customers while paying less to get them. Postpaid phone net additions went from 55,000 in the first quarter of 2026 to 184,000 in the second, putting the first half 537,000 ahead of a year earlier, and by the company’s own account, the promotional cost of acquiring a consumer improved about 15% year over year in that quarter, while the promotional cost of retention improved about 17%.

That is why the guidance keeps moving. Adjusted earnings-per-share growth guidance for 2026 started at 4% to 5%, was raised to 5% to 6%, and now stands at 6% to 7%. Free cash flow growth guidance went from roughly 7% or better to 9% to 10%, and first-half free cash flow reached $10.2 billion, up 16%. Over the prior five years, free cash flow and adjusted earnings per share both grew at roughly negative 1% a year. The catch is what Verizon gave up to buy that loyalty.

Can A Simpler Price Plan Pay For Itself?

By its own description, Verizon scrapped activation and upgrade fees, added monthly cash back, and separated phone subsidies from the price of the plan. The fees and the cash back are real money going away.

Its answer is volume and mix instead of price, and so far it is working. Mobility and broadband service revenue growth went from 1.6% in the first quarter of 2026 to 2.8% in the second; the full-year guide moved up to 2.5% to 3%, and management now expects approximately 4% year-over-year growth in the fourth quarter of 2026. There is room to recover: reported operating margin over the trailing twelve months, at 21%, sits below its three-year peak of 23%, and total revenue is growing four times its three-year average pace of 0.7%.

What The Fiber Deals Actually Add

The fiber story needs honest sizing. Verizon has signed an agreement with Google worth over $1 billion to use its dark fiber to connect data centers, and management expects further deals by the end of 2026 worth multiple billions of dollars in revenue over the next several years, starting to contribute noticeably in 2027. Set that against total revenue of $139.15 billion over the trailing twelve months: money spread across several years is a useful addition rather than a re-rating, and by management’s own framing, it arrives on top of a core business already accelerating.

Four Percent In The Fourth Quarter Is The Test

So is the upside case real? The evidence so far says yes, and from here it rests on one figure the company has committed to publicly: roughly 4% growth in mobility and broadband service revenue in the fourth quarter of 2026. Clear it and the churn-and-cost engine is confirmed, with the fiber money landing on top of it. Fall short and the case that a simpler, cheaper-to-serve Verizon can also be a faster-growing one loses its evidence. That is the number to check, and why the useful screen is companies whose guidance is still climbing.

Even A Real Turnaround Is Still A Single Bet

If you already own it, you own a better business than the one you bought, and the churn number is the clearest evidence of it. If you have been waiting, you are stepping in after a 24% six-month run rather than before it, and the recent pause does not undo it. The margin for error is narrower than that pause suggests. Either way, the harder question is not whether this company executes, but what happens to your money if one conviction turns out wrong. A single accelerating telco is not a compounding machine; a rules-based system that spreads the bet and acts on evidence is, and the Trefis High Quality portfolio is built to be exactly that. The Trefis High Quality (HQ) Portfolio has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.