Verizon (VZ) Last Update 10/22/21
% of Stock Price
Gross Profits
Free Cash Flow
Net Debt
41.3% $43.27
Trefis Price
Top Drivers for Period
Key Drivers
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TREFIS Analysis

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Potential upside & downside to trefis price

Verizon Company


  1. Wireless constitute 99% of the Trefis price estimate for Verizon's stock.


5G rollout gaining pace

Verizon has been scaling up its mobile 5G services. During 2018, Verizon commercially launched 5G Home on proprietary standards in four U.S. markets and on global standards in a fifth U.S. market in 2019. They also launched their 5G Ultra Wideband Network in 31 U.S. markets in 2019, as well as several 5G-compatible smartphones. Verizon expects to provide 5G service to 15 million homes in the U.S. by the end of 2021.

Effect of Coronavirus

The global spread of coronavirus led to lockdown in various cities across the globe, which affected industrial and economic activity. The shutdowns in major cities led to people sitting at home. Home confinement led to higher demand for streaming services and data service options. While lower economic growth and consumer spending affected demand for the company’s traditional data plans to a certain extent, the company’s decision to provide 15 GB of additional 4G data for a part of 2020 helped it retain customers.

Q2 2021 Performance

Verizon reported revenue of $33.8 billion in Q2 2021, marking a rise of 11% year-on-year. The increase was the result of wireless revenue growth, strong Fios and Verizon Media results, and increased wireless equipment revenue. For Q2 2021, Verizon's EPS came in at $1.40, compared with $1.14 in Q2 2020.

2020 Performance

Verizon reported revenue of $128.3 billion in 2020, marking a decline of 2.7% year-on-year. This decline was primarily driven by lower service and wireless equipment revenues. VZ reported lower wireless device sales partially due to an elongation of the handset upgrade cycle as well as lower gross adds and upgrade volumes. The business was also adversely affected due to limited in-store engagement and the impact of COVID-19. There was also decline in wireless service and wireline voice and video services. For 2020, Verizon's EPS came in at $4.30, compared with $4.66 in 2019.

New Share Repurchase Program

On February 6, 2020, the Board of Directors of Verizon authorized the corporation to repurchase up to 100 million shares of its common stock. Verizon’s previous program, which expired on February 29, 2020, also authorized the repurchase of 100 million shares. Under the prior authorization, no shares were repurchased and the new authorization supersedes the prior authorization.


Verizon makes money primarily through mobile phone subscription plans for consumers and businesses. The company also provides landline phone service to residences, small businesses, and large enterprises. 4G wireless, wireline broadband Internet and fiber optic TV services (FiOS) are growth areas for Verizon.


Below are key drivers of Verizon's value that present opportunities for upside or downside to the current Trefis price estimate for Verizon.

Mobile Plans & Phones

  • Wireless SG&A as % of Wireless Gross Profits: We estimate that this figure will increase from about 29% in 2020 to about 36% by the end of our review period, as Verizon may need to increase marketing expenses to compete against rivals such as AT&T, T-Mobile and Sprint. However, there could be an upside of about 5% to our price estimate if this figure stabilizes around current levels.
  • Wireless CapEx as % of Wireless Gross Profits: We expect this figure to increase from current levels of about 11% to about 19% by the end of our review period as the company expands its coverage and capacity while rolling out its 5G networks. There could be a downside of about 5% to our price estimate if this figure increases to around 25%.

For additional details, select a driver above or select a division from the interactive Trefis split for Verizon at the top of the page.


Mobile Plans & Phones constitute the majority of Verizon's value for these two reasons:

High Revenue Per Subscriber

Verizon's wireless revenues per subscriber are higher than its wireline operations and margins are also thick. Although wireless ARPUs are lower compared to the carrier's FiOS ARPUs (which remain a growth area for the wireline business) the number of mobile subscribers is much higher than FiOS subscribers, making mobile phones & plans Verizon's most important division.

Large share of the postpaid wireless market

Verizon has the largest number of lucrative postpaid phone subscribers in the U.S. wireless market. The carrier's focus on less lucrative segments such as wholesale and prepaid remains limited compared to other carriers.


Verizon's interest in mobile advertising and content

Verizon’s interest in over-the-top (OTT) services such as mobile video and advertising has been growing, as people spend more time on their mobile devices. Ad spending is quickly moving away from traditional media such as TV and newspapers, and onto mobile devices. U.S. Mobile ad spending was projected to grow by about 38% in 2015 to $42 billion, according to estimates from eMarketer, accounting for close to 21.6% of total media ad spending and 62.6% of digital ad spending. Mobile advertising seems like a natural fit for Verizon, given its massive wireless subscriber base (over 112 million subscribers), customer data sets and its control over the so-called “wireless last mile”. In 2015, the company bought AOL in a $4.4 billion deal, gaining access to a robust programmatic and video advertising platform as well a vast library of original content. In July 2016, the company announced a deal to acquire Yahoo's operating business for about $4.8 billion, enabling it to bolster its presence in the search engine and native advertising market.

Push to increase 4G capacity and deploy 5G

All major mobile operators in the U.S. have built expansive 4G networks that offer 5-10 times higher data speeds than 3G. As the first to deploy LTE, Verizon has maintained the lead and has been consistently ranked the best U.S. operator in terms of network coverage and quality. Verizon was also the world’s first carrier to take a serious step into the next-generation 5G wireless technology and the company has been steadily bolstering its millimeter wave spectrum in order to meet the bandwidth needs of the next-generation service. The company started offering wireless residential broadband services using 5G technology in a few U.S. cities in late 2018 and mobile 5G deployments could begin in the near-term.

Reducing focus on the landline market

Verizon has been stepping back from the declining landline market, to focus on the more lucrative wireless business, which is growing faster and is less heavily regulated. The wireless business is also not unionized, unlike the wireline business. In 2015, the carrier announced a deal to sell about a quarter of its total wireline base - located in Texas, California, and Florida to Frontier Communications for $10.5 billion.

Verizon's spectrum position

The wireless market is intensely competitive, with the number of wireless subscriber connections (about 355 million) exceeding the total population (328 million) in the U.S. As an ever-increasing number of smartphone users demand higher speeds and congestion-free networks, wireless carriers are hard-pressed for additional spectrum in order to meet these demands. While there are some upcoming auctions such as the 600-MHz auction due in 2016, the airwaves will take several years to be allocated to the winners. However, Verizon should be in a relatively comfortable position with regards to its spectrum depth. The carrier won AWS licenses from multiple cable companies to expand its rapidly growing LTE network. As of November 2015, the carrier was using only about 40% of its spectrum portfolio to support its LTE network, which carries more than 80% of its data traffic.

Mobile Voice Declines Offset by Data

Mobile phone voice plan pricing has seen a gradual decline, as competition has intensified and technology (primarily speed and reliability) and reach have improved. Increasingly, data access is a significant part of usage. So, while average voice revenues have been on a downward trend, the increased data revenue contribution has helped mitigate the impact on total ARPU. Verizon has also been letting go of its feature phone subscribers while focusing on retaining higher-value smartphone users.