Verizon Beats Expectations, Boosts Outlook — Here's Why Analysts Still See More Room To Grow

Wall Street analysts rerated Verizon Communications (NYSE:VZ) after the company reported its second-quarter results on Monday.

Verizon reported quarterly revenue growth of 5.2% year-over-year (Y/Y), reaching $34.50 billion, topping the analyst consensus estimate of $33.57 billion. This growth was driven by its broad wireless and broadband offerings across market segments.

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Verizon reiterated a 2%-2.8% growth in wireless service revenue. It narrowed its adjusted EPS outlook from $4.59-$4.73 to $4.64-$4.73 versus the consensus of $4.68, driven by demand for its higher-tier plans, per the Reuters report.

Verizon expects $19.5 billion-$20.5 billion (prior $17.5 billion-$18.5 billion) in 2025 free cash flow, $37 billion-$39 billion (prior $35 billion-$37 billion) in operating cash flow, and reiterated $17.5 billion-$18.5 billion in capital expenditure.

RBC Capital analyst Jonathan Atkin maintained Verizon with a Sector Perform and raised the price target from $45 to $46.

Raymond James analyst Frank G. Louthan reiterated Verizon with an Outperform with a price target of $47.

RBC Capital: Verizon beat financial expectations in second-quarter 2025, reporting consolidated revenue of $34.5 billion — up 5.2% year-over-year and 2.2% ahead of consensus — driven primarily by stronger wireless equipment sales, Atkin noted. Adjusted EBITDA grew 4.1% to $12.8 billion, and adjusted EPS of $1.22 was 3% above expectations. The analyst added that free cash flow hit $5.2 billion, exceeding the $4.8 billion forecast, supported by a lighter-than-expected capex of $3.8 billion.

Management raised full-year 2025 guidance: adjusted EBITDA rose 0.25%, EPS by 0.5%, and free cash flow by 11% (+$2 billion), citing tax benefits, he noted. However, Atkin said the company abandoned its commitment to grow postpaid phone net additions year-over-year, instead prioritizing service revenue and EBITDA growth. The analyst revised net additions downward while recognizing improved cost efficiencies.

He said that postpaid phone net losses totaled 9,000 in second-quarter — primarily in line with consensus — bolstered by a 19% surge in consumer gross additions. Yet churn rose to 0.97%, reflecting lingering pressure from earlier pricing changes and aggressive competition, Atkin noted.

The analyst pointed out that the business segment saw weaker performance, with just 42,000 net additions versus expectations of 75,000, impacted by a decline in government wireless users. He said other postpaid additions (wearables, tablets, FWA) came in soft at 164,000 versus 218,000 forecast.

Consumer revenue rose 6.9% to $26.6 billion, led by 30% growth in equipment revenue, while service revenue rose 2.1%, Atkin said. Adjusted EBITDA for consumer was up 2.1% to $11.2 billion. Business revenue fell 0.3% to $7.3 billion, but EBITDA rose 6%, supported by cost-cutting and copper decommissioning. The analyst added that Verizon also recorded stronger performance in advanced 5G and AI Connect initiatives, with the sales pipeline doubling to $2 billion.

He noted that broadband net additions of 293,000 missed expectations, driven by softer demand, slower MDU penetration, and nearing saturation in C-Band coverage.

Atkin wrote that Verizon reaffirmed its goal of 8 to 9 million FWA subscribers by 2028 and aims to cover nearly all sites with C-Band by 2026.

Overall, Verizon’s financial execution was strong, tax benefits drove upside to cash flow, and disciplined capital spending and efficiency gains helped offset wireless and broadband subscriber softness, per the analyst. Atkin added that the company remains focused on improving productivity and investing in AI-driven infrastructure to drive long-term growth, even as it navigates short-term subscriber pressures.

Atkin projected fiscal 2025 revenue of $138.8 billion and EPS of $4.68.

Raymond James: The rerating followed strong second-quarter 2025 results and an upward revision to full-year guidance, Louthan noted. Management raised its fiscal 2025 outlook, now expecting adjusted EBITDA growth of 2.5%–3.5%, up from 2%–3.5%, adjusted EPS growth of 1–3% (vs. 0%–3% prior), and free cash flow of $19.5–$20.5 billion, a $2 billion increase from earlier expectations.

These improvements reflect solid execution, cost-cutting from voluntary workforce reductions, and favorable tax legislation, which could deliver up to $2 billion annually in cash benefits, the analyst added.

Despite raising financial targets, Louthan noted that management pulled back its previous forecast for positive full-year postpaid handset additions.

Instead, he said the company is pursuing more disciplined, high-margin subscriber growth without participating in aggressive or unprofitable marketing tactics. Verizon’s strategy includes price increases, bundling upsells into unlimited plans, and operational efficiency gains — all boosting earnings, per the analyst. He noted the stock continues to offer an attractive ~6.5% dividend yield and serves as a defensive holding with strong recurring, primarily domestic, revenue.

Verizon also anticipates mid-single-digit growth in handset upgrade activity for fiscal 2025 and expects its prepaid business to contribute positively to wireless service revenue in the second half, Louthan noted. Management believes public sector weakness in the business segment will ease by year-end, further supporting growth. Additionally, the tax reform tailwinds are expected to extend beyond 2025, giving the company more flexibility in capital allocation—especially after the Frontier (FYBR) acquisition, which Louthan modelled closing by first-quarter of 2026.

On broadband, Verizon cited a softer home-move environment in its Fios footprint, which has modestly weighed on growth, the analyst noted. However, the company remains ahead of its fiber-to-the-home (FTTH) rollout plan. It will likely exceed the 650,000-passing target, a development he said was favorable for infrastructure partner Dycom (DY). At the same time, less household churn may benefit cable operators through increased customer stickiness, Louthan added.

Louthan projected fiscal 2025 revenue of $137.9 billion and EPS of $4.70.

VZ Price action: VZ stock is trading higher by 0.61% to $42.77 at publication on Tuesday.

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