VZ
VZ
Accumulate 2026-04-28
Model
DDM
Price at Report
$47.10
Base IV
$54.11
Bear IV
$46.43
Bull IV
$61.19
Entry Zone: 38-44 · Sell Above: 56
Bore Family Office
Valuation Report — Verizon Communications Inc. (VZ) • April 28, 2026
3-Stage DDM (Ke) • Discount Rate: 7.50% • Current Price: $47.10
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. VZ's competitive moat is built on premium spectrum assets, nationwide network coverage, and high switching costs.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Consumer Wireless | $98,000M | 71% | +2.0% | — | Postpaid phone + FWA; 115M+ connections |
| Business Wireless | $32,000M | 23% | +4.0% | — | Enterprise, government, IoT; FWA growth driver |
| Wireline / Other | $8,200M | 6% | -3.0% | — | Declining legacy services |
| Blended Growth Rate | — | 100% | +2.2% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Capital Harvester: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $133,613 | $136,835 | $133,974 | $134,788 | $138,191 |
| Rev YoY Growth | — | +2.4% | -2.1% | +0.6% | +2.5% |
| Gross Margin | 59.1% | 58.7% | 58.8% | 59.0% | 59.0% |
| EBITDA ($M) | $51,200 | $49,800 | $47,200 | $49,000 | $50,500 |
| EBITDA Margin | 38.3% | 36.4% | 35.2% | 36.4% | 36.5% |
| Operating Income ($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) | $17,500 | $15,500 | $14,000 | $16,000 | $15,000 |
| Annual DPS | $2.535 | $2.585 | $2.635 | $2.660 | $2.685 |
| Total Debt ($M) | $143,425 | $140,676 | $137,701 | $121,381 | $139,532 |
💹 Capital Return & Share Count Analysis
Net Share Change
+2.0% (2021→2025)
📈 Net dilution — issuances exceed buybacks
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 4150.0M | — | — | — |
| 2022 | 4204.0M | +1.3% | — | — |
| 2023 | 4215.0M | +0.3% | — | — |
| 2024 | 4223.0M | +0.2% | — | — |
| 2025 | 4231.0M | +0.2% | — | — |
VZ does not have an active buyback program. Share count has been gradually increasing due to equity compensation. Capital return is overwhelmingly via dividend (~$11.3B/yr vs. minimal buybacks).
📈 DDM Scenarios
$46
🔴 Bear
$54
📊 Base
$61
🚀 Bull
$47.10
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% | $46 | ▼1.4% |
| 📊 Base | 3.5% | 2.5% | 2.0% | 7.50% | $54 | ▲14.9% |
| 🚀 Bull | 4.5% | 3.0% | 2.5% | 7.50% | $61 | ▲29.9% |
📋 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 | $2.739 | $2.548 | $2.55 |
| Year 2 | Stage 1 | $2.793 | $2.417 | $4.96 |
| Year 3 | Stage 1 | $2.849 | $2.294 | $7.26 |
| Year 4 | Stage 1 | $2.906 | $2.176 | $9.43 |
| Year 5 | Stage 1 | $2.964 | $2.065 | $11.50 |
| Year 6 | Stage 2 | $3.009 | $1.950 | $13.45 |
| Year 7 | Stage 2 | $3.054 | $1.841 | $15.29 |
| Year 8 | Stage 2 | $3.100 | $1.738 | $17.03 |
| Year 9 | Stage 2 | $3.146 | $1.641 | $18.67 |
| Year 10 | Stage 2 | $3.194 | $1.549 | $20.22 |
| Terminal | — | TV=$54.02 | PV(TV)=$26.21 (56% of IV) | $46.43 |
| Intrinsic Value | — | — | PV(Divs) $20.22 + PV(TV) $26.21 | $46.43 |
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) = $54.02. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $26.21). Intrinsic value = PV of all dividends ($20.22) + PV of terminal value ($26.21) = $46.43 per share.
Base Scenario
Stage 1: 3.5% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.779 | $2.585 | $2.59 |
| Year 2 | Stage 1 | $2.876 | $2.489 | $5.07 |
| Year 3 | Stage 1 | $2.977 | $2.396 | $7.47 |
| Year 4 | Stage 1 | $3.081 | $2.307 | $9.78 |
| Year 5 | Stage 1 | $3.189 | $2.221 | $12.00 |
| Year 6 | Stage 2 | $3.269 | $2.118 | $14.12 |
| Year 7 | Stage 2 | $3.350 | $2.019 | $16.14 |
| Year 8 | Stage 2 | $3.434 | $1.926 | $18.06 |
| Year 9 | Stage 2 | $3.520 | $1.836 | $19.90 |
| Year 10 | Stage 2 | $3.608 | $1.751 | $21.65 |
| Terminal | — | TV=$66.91 | PV(TV)=$32.47 (60% of IV) | $54.11 |
| Intrinsic Value | — | — | PV(Divs) $21.65 + PV(TV) $32.47 | $54.11 |
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) = $66.91. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $32.47). Intrinsic value = PV of all dividends ($21.65) + PV of terminal value ($32.47) = $54.11 per share.
Bull Scenario
Stage 1: 4.5% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.806 | $2.610 | $2.61 |
| Year 2 | Stage 1 | $2.932 | $2.537 | $5.15 |
| Year 3 | Stage 1 | $3.064 | $2.466 | $7.61 |
| Year 4 | Stage 1 | $3.202 | $2.398 | $10.01 |
| Year 5 | Stage 1 | $3.346 | $2.331 | $12.34 |
| Year 6 | Stage 2 | $3.446 | $2.233 | $14.58 |
| Year 7 | Stage 2 | $3.550 | $2.140 | $16.71 |
| Year 8 | Stage 2 | $3.656 | $2.050 | $18.76 |
| Year 9 | Stage 2 | $3.766 | $1.964 | $20.73 |
| Year 10 | Stage 2 | $3.879 | $1.882 | $22.61 |
| Terminal | — | TV=$79.52 | PV(TV)=$38.58 (63% of IV) | $61.19 |
| Intrinsic Value | — | — | PV(Divs) $22.61 + PV(TV) $38.58 | $61.19 |
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) = $79.52. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $38.58). Intrinsic value = PV of all dividends ($22.61) + PV of terminal value ($38.58) = $61.19 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.5% | $77 | $85 | $96 | $111 | $133 |
| 6.0% | $69 | $75 | $82 | $92 | $107 |
| 6.5% | $62 | $66 | $72 | $79 | $89 |
| 7.0% | $56 | $60 | $64 | $69 | $76 |
| 7.5% | $51 | $54 | $58 | $62 | $67 |
| 8.0% | $47 | $50 | $52 | $56 | $60 |
| 8.5% | $44 | $46 | $48 | $51 | $54 |
| 9.0% | $41 | $42 | $44 | $46 | $49 |
| 9.5% | $38 | $40 | $41 | $43 | $45 |
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 | Price | Div Yield | P/E | EV/EBITDA | D/E |
|---|---|---|---|---|---|---|
| Verizon | VZ | $47.10 | 6.0% | 11.6x | 7.0x | 4.9x |
| AT&T | T | $27.50 | 4.1% | 9.8x | 6.5x | 3.2x |
| T-Mobile | TMUS | $245.00 | 1.5% | 24.5x | 12.1x | 2.8x |
| Telecom Avg | — | — | 3.9% | 15.3x | 8.5x | 3.6x |
🔮 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 |
|---|---|---|---|---|
| J. Kees | Daiwa | Strong Buy | $58 | +23.1% |
| M. Rollins | Citigroup | Strong Buy | $55 | +16.8% |
| M. Yaghi | Scotiabank | Buy | $55 | +16.8% |
| S. Petti | JP Morgan | Hold | $49 | +4.0% |
| K. Venkateshwar | Barclays | Hold | $47 | -0.2% |
💡 Investment Thesis
- Defensive income stock — 6.0% dividend yield with 20+ years of consecutive increases, backed by ~$37B annual operating cash flow.
- 5G and FWA growth — Fixed wireless access is the key subscriber growth lever, adding 500K+ net adds per quarter.
- Deleveraging path — VZ is actively reducing debt ($139B → target <4x net leverage), which improves financial flexibility.
- 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)
+1,696,362 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
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
VZ Investor Relations - Verizon Communications Inc - Alpha S
Financial Guidance Met: The company achieved all 2025 financial guidance, including previously raised targets for adjusted EBITDA, EPS, and free cash flow. Cost Savings & Transformation: Verizon is executing a $5 billion OpEx savings pl
Financial Guidance Met: The company achieved all 2025 financial guidance, including previously raised targets for adjusted EBITDA, EPS, and free cash flow. Cost Savings & Transformation: Verizon is executing a $5 billion OpEx savings pl
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
Verizon Reviews in New York City | Glassdoor
How is the work culture at Verizon in New York City?Employees in New York City have rated Verizon with 3.8 out of 5 for work-life-balance (8.2% higher than company-wide rating), 4.1 out of 5 for diversity and inclusion (equ
How is the work culture at Verizon in New York City?Employees in New York City have rated Verizon with 3.8 out of 5 for work-life-balance (8.2% higher than company-wide rating), 4.1 out of 5 for diversity and inclusion (equ
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Accumulate — Verizon Communications Inc. (VZ)
Current price: $47.10 | Analyst Avg PT: $50.17
$46
🔴 Bear
$54
📊 Base
$61
🚀 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 $47.10, VZ trades near base-case fair value with a 6.0% 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.
🔧 Model Notes & Calibration
3-Stage DDM using DPS of $2.685 as base. VZ is a mature telecom with ~67% payout ratio. Ke of 7.50% (vs. pure CAPM 5.44%): VZβs extremely low beta (0.217) dramatically understates equity risk — the company carries $139.5B in debt (Debt/EBITDA ~4.9x), creating significant financial leverage risk that CAPM beta does not capture. A levered beta approach (unlever industry β≈1.0, relever to VZ D/E) yields β≈1.5, which gives Ke≈12.5% — too high. We split the difference at 7.50%, which is consistent with the yield-plus-risk-premium approach (6.0% yield + 1.5% growth premium = 7.5%). Stage 1 growth 3.5% reflects management EPS growth guidance (~5% EPS growth offset by 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.
Bore Family Office • Analysis generated by Lurch • Not investment advice.