Verizon Shares Jump on Strong Subscriber Growth and Buyback. Is It Too Late to Buy the Stock?

In October, caller Verizon (NYSE: VZ) CEO Daniel Schulman said the institution was going to marque a cardinal strategy displacement aft continuing to suffer wireless customers, saying it would determination to a much customer-focused attack from a technology-centric one.

It didn't instrumentality agelong for this caller maneuver to wage off, with the institution seeing its highest quarterly nett subscriber additions since 2019.

Where to put $1,000 close now? Our expert squad conscionable revealed what they judge are the 10 champion stocks to bargain close now, erstwhile you articulation Stock Advisor. See the stocks »

During the quarter, Verizon added 1 cardinal nett subscribers, including 616,000 postpaid telephone subs. It besides added 372,000 broadband nett additions, including 319,000 fixed wireless subs and 67,000 Fios households.

Verizon's wide gross roseate 2% twelvemonth implicit twelvemonth to $36.4 billion, with work gross edging up 0.1% to $28.2 cardinal and wireless instrumentality gross climbing 9.1% to $8.2 billion.

Consumer gross accrued by 3.2% twelvemonth implicit twelvemonth to $28.14 billion, with work gross up 0.9%. The company's concern portion continued to lag, with gross decreasing by 1.8% twelvemonth implicit twelvemonth to $7.4 billion, arsenic wireline customers proceed to churn off.

Overall adjusted EPS slipped by 0.9% to $1.09, portion net earlier interest, taxes, depreciation, and amortization (EBITDA) fell 0.6% to $11.9 billion.

Looking ahead, Verizon projected it would adhd betwixt 750,000 to 1 cardinal postpaid telephone subscribers successful 2026. It is looking for mobility and broadband work gross to emergence betwixt 2% to 3%, and for adjusted EPS to ascent by 4% to 5% to betwixt $4.90 and $4.95.

Verizon besides announced a immense $25 cardinal buyback to beryllium completed implicit the adjacent 3 years, portion reiterating its committedness to its dividend. This volition beryllium backed by its beardown escaped currency flow, which the institution sees climbing by 7% adjacent twelvemonth to $21.5 billion. At the aforesaid time, it plans to support its unsecured leverage (net unsecured net/adjusted EBITDA) betwixt 2 times and 2.25 times to support its equilibrium expanse strength.

Verizon has decided it volition nary longer beryllium the wireless institution that others bargain customers from, and its nett additions successful Q4 were impressive. Meanwhile, with the closing of the acquisition of Frontier Communications, Verizon has a large cross-selling and bundling accidental successful beforehand of it.

The dividend looks secure, being good covered by Verizon's escaped currency flow, portion the buyback should assistance lend enactment to its lagging banal price. Even aft the stock's post-earnings jump, it inactive trades astatine a guardant price-to-earnings (P/E) ratio of 9.2 times based connected 2026 net estimates, compared to an 11.3 times aggregate for rival AT&T. With a 6.5% guardant yield, Verizon is simply a coagulated dividend banal to inactive buy.