Are You Overpaying For Verizon Stock Versus Its Rivals?
A $10,000 stake in Verizon Communications (VZ) a year ago is now worth about $11,660, the top result in its group of five. Verizon ranks only third of the five on revenue growth and third again on operating margin. So are you paying for what Verizon earns today, or for a recovery it has only started to show?
Verizon’s Price Appears To Assume A Recovery
Verizon’s results so far do not explain its price, so the price appears to assume a recovery. Verizon’s shares cost 12.2 times a year of its profit, a ratio called price to earnings, or P/E. AT&T’s shares cost 8.2 times. AT&T also grew revenue faster over the past year, 2.6% against Verizon’s 1.4%.
The two companies keep almost the same share of sales as operating profit: 21% at AT&T and 21% at Verizon. Their stocks went opposite ways. AT&T’s shares lost 7.4% over the past 12 months, while Verizon’s led the group.
| VZ | T | TMUS | CMCSA | CHTR | |
|---|---|---|---|---|---|
| Market Cap ($ Bil) | 197.2 | 176.6 | 178.9 | 78.9 | 14.1 |
| PE Ratio | 12.2 | 8.2 | 16.9 | 7.0 | 2.9 |
| LTM Revenue Growth | 1.4% | 2.6% | 9.7% | 0.6% | -1.5% |
| LTM Operating Margin | 20.5% | 20.6% | 20.1% | 14.7% | 23.8% |
| 12M Stock Return | 16.6% | -7.4% | -29.5% | -21.8% | -56.0% |
Charter Communications keeps the widest operating margin of the five, at 24%. Its stock lost 56% of its value over the year. Neither margin nor growth lines up with Verizon’s lead. Verizon’s higher P/E than AT&T’s fits only if its phone business is changing in ways the yearly figures do not yet show.
Is Verizon’s Phone Business Actually Changing?
Verizon’s phone business did change in the second quarter of 2026, at least in customer numbers. Verizon added a net 184,000 postpaid phone customers, the kind who pay a monthly bill. Management said its consumer business gained postpaid phone customers in the second quarter for the first time since 2021.
Revenue from phone and home internet plans combined rose 2.8% from a year earlier to $23.4 billion. Wireless service revenue alone declined 0.7%, to $20.8 billion. Total revenue slipped 0.7% as well, held back by lower equipment sales. Management is also separating phone subsidies from the price of its plans. It expects meaningfully better margins from that change.
Management raised its 2026 forecast for plan revenue growth to 2.5% to 3.0%, up from 2.5%. It sees growth approaching 3% in the third quarter. For the fourth quarter it expects about 4%.
Paying For A Turn After Three Years Of Decline
Verizon’s operating margin has fallen from 22% three years ago to 21% now. That is the lowest level of the past five years. Earnings per share shrank by 8.4% a year over the past three years. So the price asks you to pay for a turn after three years in which margin and profit per share both fell.
Verizon’s debt, net of cash, equals 3.9 times a year of earnings before interest, tax, depreciation, and amortization. Management tracks a narrower ratio, net unsecured debt to adjusted EBITDA, which was 2.5 times at the end of the second quarter. Management expects to reach its target leverage range during 2027.
The price appears to assume that Verizon keeps adding phone customers and turns them into faster plan revenue. The evidence so far is one quarter of postpaid phone customer gains and a raised forecast. Verizon’s next report will show if third-quarter plan revenue growth reached the pace management forecast. If it does, the premium over AT&T has some support. If it falls short, you pay a higher P/E than AT&T’s for a company whose revenue grew more slowly than AT&T’s.
How To Act On VZ?
