VZ
VZ
Strong Buy 2026-05-02
Model
DDM
Price at Report
$48.11
Base IV
$55.89
Bear IV
$49.03
Bull IV
$63.21
Entry Zone: 38-44 · Sell Above: 56
Bore Family Office
Valuation Report — Verizon Communications Inc. (VZ) • May 2, 2026
3-Stage DDM (Ke) • Discount Rate: 7.50% • Current Price: $48.11
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Verizon is one of the largest wireless carriers in the US, serving 115M+ retail connections across consumer and business segments. The company generates the bulk of revenue from wireless service plans, with growing contributions from fixed wireless access (FWA) and 5G enterprise solutions. VZβs competitive moat is built on premium spectrum assets, nationwide network coverage, and high switching costs.
Revenue has been flat (0-2% historically), but the 5G investment cycle is beginning to monetize. The TracFone acquisition (closed 2021) expanded the prepaid base and is now largely integrated. Management targets EPS growth in the low-to-mid 20%s in 2026, driven by normalization from the 2023 impairment and improved FWA subscriber counts.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Consumer Wireless | — | 71% | +2.5% | — | Postpaid phone + FWA; 115M+ connections |
| Business Wireless | — | 23% | +2.0% | — | Enterprise, government, IoT; FWA growth driver |
| Wireline / Other | — | 6% | -2.0% | — | Declining legacy services (Fios TV, landline) |
| Blended Growth Rate | — | 100% | +2.1% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Capital Harvester: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $133,613 | $136,835 | $133,974 | $134,788 | $138,191 |
| Rev YoY Growth | — | +2.4% | -2.1% | +0.6% | +2.5% |
| Gross Margin | 57.9% | 56.8% | 59.0% | 59.9% | 58.9% |
| EBITDA ($M) | $48,654 | $47,566 | $40,501 | $46,578 | $47,608 |
| EBITDA Margin | 36.4% | 34.8% | 30.2% | 34.6% | 34.5% |
| Operating Income ($M) | $32,448 | $30,467 | $22,877 | $28,686 | $29,259 |
| Operating Margin | 24.3% | 22.3% | 17.1% | 21.3% | 21.2% |
| Net Income ($M) | $22,065 | $21,256 | $11,614 | $17,506 | $17,174 |
| Net Margin | 16.5% | 15.5% | 8.7% | 13.0% | 12.4% |
| EPS (diluted) | $5.32 | $5.06 | $2.75 | $4.14 | $4.06 |
| Free Cash Flow ($M) | $19,253 | $14,054 | $18,708 | $19,822 | $20,126 |
| Annual DPS | $2.535 | $2.585 | $2.635 | $2.685 | $2.735 |
| Total Debt ($M) | $177,930 | $176,331 | $174,942 | $168,357 | $181,643 |
💹 Capital Return & Share Count Analysis
Net Share Change
+2.0% (2021→2025)
📈 Net dilution — issuances exceed buybacks
EPS Amplification
EPS grew -23.7% vs net income -22.2% over the period — -1.5pp of EPS growth diluted by share issuance.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 4150.0M | — | $3,900 | 2.0% |
| 2022 | 4204.0M | +1.3% | $3,300 | 1.6% |
| 2023 | 4215.0M | +0.3% | $2,100 | 1.0% |
| 2024 | 4223.0M | +0.2% | $1,200 | 0.6% |
| 2025 | 4231.0M | +0.2% | $800 | 0.4% |
VZ does not have an active buyback program. Share count has been gradually increasing due to equity compensation. Capital return is overwhelmingly via dividend (~$12B/yr at current DPS). Buybacks declined sharply post-2021 as debt reduction took priority. Net buyback yield is currently negative (-0.05% per stockanalysis).
📈 DDM Scenarios
$49
🔴 Bear
$56
📊 Base
$63
🚀 Bull
$48.11
Current Price
$50
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 2.0% | 1.5% | 1.5% | 7.50% | $49 | ▲1.9% |
| 📊 Base | 3.0% | 2.5% | 2.0% | 7.50% | $56 | ▲16.2% |
| 🚀 Bull | 4.0% | 3.0% | 2.5% | 7.50% | $63 | ▲31.4% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 2.0% | Stage 2: 1.5% | Terminal: 1.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.892 | $2.690 | $2.69 |
| Year 2 | Stage 1 | $2.950 | $2.552 | $5.24 |
| Year 3 | Stage 1 | $3.009 | $2.422 | $7.66 |
| Year 4 | Stage 1 | $3.069 | $2.298 | $9.96 |
| Year 5 | Stage 1 | $3.130 | $2.180 | $12.14 |
| Year 6 | Stage 2 | $3.177 | $2.059 | $14.20 |
| Year 7 | Stage 2 | $3.225 | $1.944 | $16.14 |
| Year 8 | Stage 2 | $3.273 | $1.835 | $17.98 |
| Year 9 | Stage 2 | $3.322 | $1.733 | $19.71 |
| Year 10 | Stage 2 | $3.372 | $1.636 | $21.35 |
| Terminal | — | TV=$57.04 | PV(TV)=$27.68 (56% of IV) | $49.03 |
| Intrinsic Value | — | — | PV(Divs) $21.35 + PV(TV) $27.68 | $49.03 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $57.04. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $27.68). Intrinsic value = PV of all dividends ($21.35) + PV of terminal value ($27.68) = $49.03 per share.
Base Scenario
Stage 1: 3.0% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.920 | $2.716 | $2.72 |
| Year 2 | Stage 1 | $3.008 | $2.603 | $5.32 |
| Year 3 | Stage 1 | $3.098 | $2.494 | $7.81 |
| Year 4 | Stage 1 | $3.191 | $2.389 | $10.20 |
| Year 5 | Stage 1 | $3.287 | $2.289 | $12.49 |
| Year 6 | Stage 2 | $3.369 | $2.183 | $14.67 |
| Year 7 | Stage 2 | $3.453 | $2.081 | $16.76 |
| Year 8 | Stage 2 | $3.539 | $1.984 | $18.74 |
| Year 9 | Stage 2 | $3.628 | $1.892 | $20.63 |
| Year 10 | Stage 2 | $3.718 | $1.804 | $22.44 |
| Terminal | — | TV=$68.96 | PV(TV)=$33.46 (60% of IV) | $55.89 |
| Intrinsic Value | — | — | PV(Divs) $22.44 + PV(TV) $33.46 | $55.89 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $68.96. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $33.46). Intrinsic value = PV of all dividends ($22.44) + PV of terminal value ($33.46) = $55.89 per share.
Bull Scenario
Stage 1: 4.0% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.948 | $2.743 | $2.74 |
| Year 2 | Stage 1 | $3.066 | $2.653 | $5.40 |
| Year 3 | Stage 1 | $3.189 | $2.567 | $7.96 |
| Year 4 | Stage 1 | $3.317 | $2.483 | $10.45 |
| Year 5 | Stage 1 | $3.449 | $2.403 | $12.85 |
| Year 6 | Stage 2 | $3.553 | $2.302 | $15.15 |
| Year 7 | Stage 2 | $3.659 | $2.206 | $17.36 |
| Year 8 | Stage 2 | $3.769 | $2.113 | $19.47 |
| Year 9 | Stage 2 | $3.882 | $2.025 | $21.49 |
| Year 10 | Stage 2 | $3.999 | $1.940 | $23.44 |
| Terminal | — | TV=$81.97 | PV(TV)=$39.77 (63% of IV) | $63.21 |
| Intrinsic Value | — | — | PV(Divs) $23.44 + PV(TV) $39.77 | $63.21 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (7.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $81.97. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $39.77). Intrinsic value = PV of all dividends ($23.44) + PV of terminal value ($39.77) = $63.21 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.5% | $80 | $88 | $99 | $114 | $137 |
| 6.0% | $71 | $77 | $85 | $95 | $110 |
| 6.5% | $64 | $68 | $74 | $82 | $92 |
| 7.0% | $58 | $62 | $66 | $72 | $79 |
| 7.5% | $53 | $56 | $59 | $64 | $69 |
| 8.0% | $49 | $51 | $54 | $57 | $62 |
| 8.5% | $45 | $47 | $49 | $52 | $55 |
| 9.0% | $42 | $44 | $46 | $48 | $50 |
| 9.5% | $39 | $41 | $42 | $44 | $46 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | Ticker | P/E | EV/EBITDA | P/FCF | Div Yield | Debt/EBITDA | Notes |
|---|---|---|---|---|---|---|---|
| AT&T | T | 10.2x | 6.9x | 8.1x | 4.5% | 3.2x | Higher leverage, DirecTV drag |
| T-Mobile US | TMUS | 24.5x | 12.1x | 19.0x | 1.5% | 2.8x | Growth premium, lower debt |
| Comcast | CMCSA | 10.8x | 7.2x | 10.5x | 3.0% | 3.6x | Cable + media; diversified |
| Verizon 5-yr avg | — | 11.0x | 6.8x | 9.5x | 5.8% | 4.0x | Own historical midpoint |
| Verizon (current) | VZ | 11.8x | 6.6x | 9.6x | 5.9% | 3.8x | High yield, low growth telecom |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.835 |
| Current Yield | 5.90% |
| Consecutive Growth Years | 21 |
| 1-yr DPS CAGR | +1.8% |
| 3-yr DPS CAGR | +1.9% |
| 5-yr DPS CAGR | +2.2% |
| 10-yr DPS CAGR | +2.2% |
| Payout Ratio (DPS/EPS) | 67.3% |
| FCF Payout Ratio | 63.0% |
| Sustainability Verdict | Watch — Slow Growth, High Payout |
Verizonβs dividend yield of ~5.9% is among the highest in the S&P 500, supported by 21 consecutive years of growth. However, growth has slowed to ~1.8-2.0% annually over the past 3-5 years, and the 67% payout ratio on EPS leaves limited room for acceleration. FCF payout at ~63% is more comfortable. The dividend is safe at current FCF levels ($20B/year vs. ~$12B in dividends), but growth will remain muted at 1.5-2.5% unless debt paydown accelerates significantly. The 2026 EPS normalization (from 2023 impairment) creates a temporary payout ratio compression, which may allow modest growth acceleration in the near term.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $5.32 | — | — | — | Actual |
| 2022 | $5.06 | — | — | — | Actual |
| 2023 | $2.75 | — | — | — | Actual |
| 2024 | $4.14 | — | — | — | Actual |
| 2025 | $4.06 | — | — | — | Actual |
| 2026 | $4.65 | $5.06 | $5.20 | 29 | Estimate |
| 2027 | $4.81 | $5.41 | $5.79 | 28 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $133.6B | — | — | — | Actual |
| 2022 | $136.8B | — | — | — | Actual |
| 2023 | $134.0B | — | — | — | Actual |
| 2024 | $134.8B | — | — | — | Actual |
| 2025 | $138.2B | — | — | — | Actual |
| 2026 | $138.8B | $148.4B | $154.4B | 29 | Estimate |
| 2027 | $140.3B | $150.4B | $158.2B | 28 | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Michael Rollins | Citigroup | Strong Buy | $55 | +14.3% |
| Sebastiano Petti | JP Morgan | Hold | $52 | +8.1% |
| Benjamin Swinburne | Morgan Stanley | Hold | $50 | +3.9% |
| Kannan Venkateshwar | Barclays | Hold | $47 | -2.3% |
| Eric Luebchow | Wells Fargo | Hold | $46 | -4.4% |
💡 Investment Thesis
- Defensive income stock — 5.9% dividend yield with 21+ years of consecutive increases, backed by ~$37B annual operating cash flow and ~$20B FCF.
- 5G and FWA growth — Fixed wireless access is the key subscriber growth lever, adding 500K+ net adds per quarter in 2025-2026.
- Deleveraging path — VZ is actively reducing debt, targeting Debt/EBITDA <3.5x by 2027, which improves financial flexibility and may enable modest buybacks.
- Low beta defensiveness — β=0.217 means VZ outperforms in risk-off markets; telecom revenue is recession-resistant.
👔 Management Quality & Culture
CEO: Verizon Communications
Net Insider Buys (12m)
+1,703,862 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present
CEO Background & Track Record
Executive Leadership Biographies | About Verizon
Special Advisor, Former Chairman and Chief Executive Officer of Verizon Communications Inc.
Special Advisor, Former Chairman and Chief Executive Officer of Verizon Communications Inc.
Dan Schulman | About Verizon
Prior to Verizon, Dan served for nine years as President & CEO of PayPal Holdings, Inc., where he led the company’s successful transformation to a global payments platform, tripling revenue from $8B to $30B, growing EPS
Prior to Verizon, Dan served for nine years as President & CEO of PayPal Holdings, Inc., where he led the company’s successful transformation to a global payments platform, tripling revenue from $8B to $30B, growing EPS
Hans Vestberg - Wikipedia
Slowing industry demand and new competition impacted Vestberg's tenure as CEO, despite his cost cutting efforts and acquisitions. He was ousted July 2015, following Ericsson's poor financial performance. Vestberg
Slowing industry demand and new competition impacted Vestberg's tenure as CEO, despite his cost cutting efforts and acquisitions. He was ousted July 2015, following Ericsson's poor financial performance. Vestberg
Capital Allocation & Strategy
VZ Investor Relations - Verizon Communications Inc - Alpha S
2025 · Q4 Q3 Q2 Q1 · 2024 · Q4 Q3 Q2 Q1 · 2023 · Q4 Q3 Q2 Q1 · 2022 · Q4 Q3 Q2 Q1 · 2021 · Q4 Q3 Q2 Q1 · 2020 · Q4 Q3 Q2 Q1 · 2019 · Q4 Q3 Q2 Q1 · 2018 · Q4 Q3 Q2 Q1 · 2017 · Q4 · Mr. Hans E. Vestberg · Chairman & CEO ·
2025 · Q4 Q3 Q2 Q1 · 2024 · Q4 Q3 Q2 Q1 · 2023 · Q4 Q3 Q2 Q1 · 2022 · Q4 Q3 Q2 Q1 · 2021 · Q4 Q3 Q2 Q1 · 2020 · Q4 Q3 Q2 Q1 · 2019 · Q4 Q3 Q2 Q1 · 2018 · Q4 Q3 Q2 Q1 · 2017 · Q4 · Mr. Hans E. Vestberg · Chairman & CEO ·
Q3 2024 Verizon Communications Inc Earnings Call- Sell ...
Our first capital · allocation priority is to invest in the business, and that includes investments in our network infrastructure if you think about C-Band, if you think · about Fios. It includes M&A to accelerate a str
Our first capital · allocation priority is to invest in the business, and that includes investments in our network infrastructure if you think about C-Band, if you think · about Fios. It includes M&A to accelerate a str
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Reviews
32,491
Culture Signal
Positive
✅ Strengths
- work-life balance
- good pay
- recommend
⚠️ Concerns
- layoffs
Employee Review Excerpts
Verizon "work environment" Reviews | Glassdoor
CEO approval · Business Outlook · Pros · best work culture, good pay and hike, friendly and encouraging environment · Cons · high deadlines, layoffs happening currently so we should be carefull as the layoff happens not inv
CEO approval · Business Outlook · Pros · best work culture, good pay and hike, friendly and encouraging environment · Cons · high deadlines, layoffs happening currently so we should be carefull as the layoff happens not inv
Verizon Reviews (35,380): Pros & Cons of Working At Verizon
New CEO change, not the best telecom company in the US anymore, not as much job security, high upper management seems lost
New CEO change, not the best telecom company in the US anymore, not as much job security, high upper management seems lost
Working at Verizon: 32,491 Reviews | Indeed.com
32,491 reviews from Verizon employees about Verizon culture, salaries, benefits, work-life balance, management, job security, and more.
32,491 reviews from Verizon employees about Verizon culture, salaries, benefits, work-life balance, management, job security, and more.
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Strong Buy — Verizon Communications Inc. (VZ)
Current price: $48.11 | Analyst Avg PT: $50.18
$49
🔴 Bear
$56
📊 Base
$63
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$44 | Begin position |
| Tier 2 — Add | ≤$40 | Add on weakness |
| Tier 3 — Full | ≤$38 | Full allocation |
| Sell Alert | ≥$56 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Hold. At $48.03, VZ trades near base-case fair value with a 5.9% dividend yield providing substantial income. The stock is fairly valued — not cheap enough to accumulate aggressively, not expensive enough to trim. Maintain position and collect the dividend. Add on pullbacks below $44; full position target below $40.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 5,353 |
| Average Cost Basis | $39.62 |
| Current Market Value | $257,533 |
| Unrealized P&L | $+45,447 (+21.4%) |
| Annual DPS | $2.835/yr |
| Annual Dividend Income | $15,176/yr |
| Current Yield (at price) | 5.89% |
| Yield on Cost | 7.16% |
| vs Target (~$200K) | $257,533 / $200,000 (129%) |
🔧 Model Notes & Calibration
3-Stage DDM using DPS of $2.835 as base. VZ is a mature telecom with ~67% payout ratio. Ke of 7.50% (vs. pure CAPM ~5.4%): VZβs extremely low beta (0.217) dramatically understates equity risk — the company carries ~$140B in debt (Debt/EBITDA ~3.8x), creating significant financial leverage risk that CAPM beta does not capture. A levered beta approach yields β≈1.5, which gives Ke≈12.5% — too high. We split the difference at 7.50%, consistent with yield-plus-risk-premium (5.9% yield + 1.6% growth premium = 7.5%). Stage 1 growth 3.0% reflects management guidance and modest payout expansion. Stage 2 fades to 2.5% as wireless market saturates. Terminal 2.0%. Dividend sustainability is the key risk — FCF covers DPS ~1.3x but leverage limits flexibility. 21 consecutive years of dividend growth confirmed (2006-2026).
Bore Family Office • Analysis generated by Lurch • Not investment advice.