Verizon's Subscriber Losses Raise Concerns, But Strong Business Revenue, Guidance Keeps Analyst Optimistic

Goldman Sachs analyst James Schneider maintained a Buy rating on Verizon Communications Inc (NYSE:VZ) with a price target of $52 on Tuesday.

What Happened: Verizon reported total revenue of $33.5 billion, in line with the analyst estimate of $33.4 billion and the Street (Visible Alpha Consensus Data) at $33.3 billion. Adjusted EPS was $1.19 versus the analyst estimate of $1.14 and the consensus of $1.15.

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Total wireless service revenue of $20.8 billion (+2.7% Y/Y) was in line with analyst estimates of $20.83 billion, still above the Street’s estimate of $20.44 billion.  

Postpaid phone net additions were -289k, well below the analyst estimate at -240k, and the Street at -199k. Consumer revenue of $25.6 billion was in line with analyst estimates of $25.56 billion and the Street at $25.45 billion. Consumer postpaid phone net additions were -356k, well below the analyst estimate at -320k and the Street at -289k, and consumer fixed wireless net additions came in at +199k, in line with the analyst estimate at +200k and the Street at +195k.  

Business revenue of $7.3 billion was in line with analyst estimates of $7.3 billion and the Street’s estimate of $7.3 billion.

What’s Next: Verizon reiterated its financial guidance for 2025. Wireless service revenue growth is projected to be 2%-2.8% versus the analyst estimate of +2.6%, which implies $83.7-$84.4 billion versus the analyst estimate of $84.2 billion and the Street at $82.8 billion. Adjusted EPS growth guidance stands at 0%-3% and implies $4.59-$4.73 versus the analyst and Street estimate of $4.68.  

Schneider expects a modest pullback in the stock following a mixed quarter where headline financial metrics and guidance were solid, but underlying subscriber KPIs missed Street estimates.

The analyst said investors expected Verizon to reiterate financial guidance (given the company reiterated guidance at the end of March), even though the company had guided to lower-than-expected postpaid phone net additions during conference season. He noted investors have broadly been more constructive on the stock given its defensive characteristics. However, some have expressed concerns that cracks have formed in the wireless industry’s competitive backdrop.  

VZ Price action: Verizon stock is up 1.12% at $43.44 at publication on Tuesday.

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