$VZ · Parkev Tatevosian, CFA · 2026-11-08

With increasing competition from SpaceX, I began to closely monitor other telecommunications companies such as Verizon, AT&T, and T-Mobile.

In this particular video, I would like to revisit Verizon, comparing the company’s current and long-term prospects with its new valuation, taking into account the risks coming from SpaceX, to determine whether Verizon stock represents a buying opportunity or something investors should get rid of and avoid.

Wall Street analysts who follow Verizon have already begun lowering their estimates for the company's long-term earnings per share growth. Earlier in 2026, Wall Street analysts raised their estimates, believing the company could achieve earnings per share growth of more than 10% over the next few years .

Since then, that percentage has dropped to about 7% at the time this video was recorded . From my perspective, this is the rate of earnings per share growth I expect from Verizon.

Now, analysts are more optimistic about AT &T due to the company's productivity improvements and cost control efforts, with analysts expecting AT&T's earnings to grow by more than 10% over the next few years , while Verizon's earnings per share are expected to grow by 7% over the same period.

Verizon, like AT&T, has done an acceptable job of improving its profit margin over the past decade. In 2017, it achieved an operating profit margin of approximately 20%, and this has improved to 23.9% up to the last twelve-month period.

Of course, we cannot talk about this sector without addressing debt, as it is one of the most indebted sectors in the world, and AT&T and Verizon are among the most indebted companies ever.

Verizon boasts a debt exceeding $184 billion , which is equal to or greater than its market capitalization, depending on stock price fluctuations and when you are watching this video.

The valuation of this company was volatile, but it remained within a certain range. Verizon's price-to-earnings ratio has fluctuated between 7 and 10 over the past few years. At the time of recording this video, it sits at the midpoint of this valuation range at 8.7, which I consider reasonable given the level of earnings per share growth you can expect from Verizon in the long term .

You can expect low percentage revenue growth and medium to high percentage earnings per share growth. Therefore, I also saw it as an opportunity to update my Verizon rating based on discounted cash flow , and my estimates were revised down slightly by about $300 million annually.

Given that the company is expected to generate free cash flow exceeding $23 billion annually, it was not a significant adjustment. Overall, I calculated a fair value of over $57 per share compared to the current market price of $46.

This makes the stock appear to be undervalued by about 24% based on current projected free cash flow estimates.

I have rated Verizon as a buy opportunity all year, and it has outperformed the broader S&P 500 index, with gains of over 13% year-to-date plus dividends, meaning it has outperformed the S&P 500.

Given that it is a much lower-risk stock, its risk-to- reward ratio has been excellent and may even outperform in 2026.

However, I am no longer as optimistic about Verizon as I once was due to the new competition. Therefore, I am lowering my conviction level from medium to low, and although I still consider it a buying opportunity, my confidence in this rating is lower.