VZ
VZ
Strong Buy 2026-04-27
Model
DDM
Price at Report
$46.38
Base IV
$54.31
Bear IV
$46.68
Bull IV
$63.05
Entry Zone: 44-50 · Sell Above: 62
Bore Family Office
Valuation Report — Verizon Communications Inc. (VZ) • April 27, 2026
3-Stage DDM (Ke) • Discount Rate: 7.50% • Current Price: $46.38
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Verizon Communications is one of the largest US wireless carriers, serving ~115M retail connections. The company operates America's most reliable 4G/5G network and provides broadband, fiber (Fios), and business services. Verizon was formed by the 2000 merger of Bell Atlantic and GTE.
The company carries significant debt from the 2020 C-band spectrum purchase ($52.9B), but has been steadily deleveraging. VZ is a telecom cash cow with 21 consecutive years of dividend growth, though the growth rate has slowed to ~2%/yr. The key question is whether 5G monetization can reignite growth.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Wireless (Consumer) | $78,000M | 56% | +2.0% | — | Postpaid phone — mature, competitive |
| Wireless (Business) | $32,000M | 23% | +4.0% | — | Enterprise IoT, private 5G |
| Wireline/Fios | $28,000M | 20% | +1.0% | — | Fios broadband + legacy voice |
| Blended Growth Rate | — | 100% | +2.3% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 4 — Maturity/Income: Revenue growing modestly with profits inflecting rapidly. The classic DCF sweet spot — FCF is reliable, growing, and well-anchored to analyst estimates.
Why this drives model selection: Classic DCF sweet spot — FCF inflecting and growing rapidly.
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 7.0% | <8% weak |
| FCF Margin | 14.6% | ≥10% strong |
| Debt / EBITDA | 3.2x | 2–4x moderate |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Neutral | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($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) | $154,000 | $152,000 | $148,000 | $143,000 | $140,000 |
💹 Capital Return & Share Count Analysis
Net Share Change
+1.8% (2021→2025)
📈 Net dilution — issuances exceed buybacks
EPS Amplification
EPS grew -23.7% vs net income -22.2% over the period — -1.5pp of EPS growth diluted by share issuance.
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2021 | 4140.0M | — | $200 | 0.1% |
| 2022 | 4200.0M | +1.4% | $200 | 0.1% |
| 2023 | 4204.0M | +0.1% | $200 | 0.1% |
| 2024 | 4210.0M | +0.1% | $200 | 0.1% |
| 2025 | 4216.0M | +0.1% | $200 | 0.1% |
VZ has a modest buyback program, roughly offsetting dilution. Share count is essentially flat at ~4.2B. No meaningful buyback yield (-0.19%).
📈 DDM Scenarios
$47
🔴 Bear
$54
📊 Base
$63
🚀 Bull
$46.38
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 | 0.5% | 0.5% | 2.0% | 7.50% | $47 | ▲0.6% |
| 📊 Base | 1.8% | 1.5% | 2.5% | 7.50% | $54 | ▲17.1% |
| 🚀 Bull | 2.8% | 2.5% | 3.0% | 7.50% | $63 | ▲36.0% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 0.5% | Stage 2: 0.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.844 | $2.646 | $2.65 |
| Year 2 | Stage 1 | $2.858 | $2.473 | $5.12 |
| Year 3 | Stage 1 | $2.873 | $2.312 | $7.43 |
| Year 4 | Stage 1 | $2.887 | $2.162 | $9.59 |
| Year 5 | Stage 1 | $2.901 | $2.021 | $11.61 |
| Year 6 | Stage 2 | $2.916 | $1.889 | $13.50 |
| Year 7 | Stage 2 | $2.931 | $1.766 | $15.27 |
| Year 8 | Stage 2 | $2.945 | $1.651 | $16.92 |
| Year 9 | Stage 2 | $2.960 | $1.544 | $18.47 |
| Year 10 | Stage 2 | $2.975 | $1.443 | $19.91 |
| Terminal | — | TV=$55.17 | PV(TV)=$26.77 (57% of IV) | $46.68 |
| Intrinsic Value | — | — | PV(Divs) $19.91 + PV(TV) $26.77 | $46.68 |
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) = $55.17. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $26.77). Intrinsic value = PV of all dividends ($19.91) + PV of terminal value ($26.77) = $46.68 per share.
Base Scenario
Stage 1: 1.8% | Stage 2: 1.5% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.881 | $2.680 | $2.68 |
| Year 2 | Stage 1 | $2.933 | $2.538 | $5.22 |
| Year 3 | Stage 1 | $2.986 | $2.403 | $7.62 |
| Year 4 | Stage 1 | $3.039 | $2.276 | $9.90 |
| Year 5 | Stage 1 | $3.094 | $2.155 | $12.05 |
| Year 6 | Stage 2 | $3.140 | $2.035 | $14.09 |
| Year 7 | Stage 2 | $3.188 | $1.921 | $16.01 |
| Year 8 | Stage 2 | $3.235 | $1.814 | $17.82 |
| Year 9 | Stage 2 | $3.284 | $1.713 | $19.54 |
| Year 10 | Stage 2 | $3.333 | $1.617 | $21.15 |
| Terminal | — | TV=$68.33 | PV(TV)=$33.15 (61% of IV) | $54.31 |
| Intrinsic Value | — | — | PV(Divs) $21.15 + PV(TV) $33.15 | $54.31 |
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) = $68.33. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $33.15). Intrinsic value = PV of all dividends ($21.15) + PV of terminal value ($33.15) = $54.31 per share.
Bull Scenario
Stage 1: 2.8% | Stage 2: 2.5% | Terminal: 3.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $2.909 | $2.706 | $2.71 |
| Year 2 | Stage 1 | $2.991 | $2.588 | $5.29 |
| Year 3 | Stage 1 | $3.074 | $2.475 | $7.77 |
| Year 4 | Stage 1 | $3.161 | $2.367 | $10.14 |
| Year 5 | Stage 1 | $3.249 | $2.263 | $12.40 |
| Year 6 | Stage 2 | $3.330 | $2.158 | $14.56 |
| Year 7 | Stage 2 | $3.413 | $2.058 | $16.61 |
| Year 8 | Stage 2 | $3.499 | $1.962 | $18.58 |
| Year 9 | Stage 2 | $3.586 | $1.871 | $20.45 |
| Year 10 | Stage 2 | $3.676 | $1.784 | $22.23 |
| Terminal | — | TV=$84.14 | PV(TV)=$40.82 (65% of IV) | $63.05 |
| Intrinsic Value | — | — | PV(Divs) $22.23 + PV(TV) $40.82 | $63.05 |
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 (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $84.14. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $40.82). Intrinsic value = PV of all dividends ($22.23) + PV of terminal value ($40.82) = $63.05 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 5.5% | $73 | $80 | $90 | $104 | $124 |
| 6.0% | $65 | $70 | $77 | $87 | $100 |
| 6.5% | $58 | $62 | $68 | $74 | $83 |
| 7.0% | $53 | $56 | $60 | $65 | $72 |
| 7.5% | $49 | $51 | $54 | $58 | $63 |
| 8.0% | $45 | $47 | $49 | $52 | $56 |
| 8.5% | $42 | $43 | $45 | $48 | $51 |
| 9.0% | $39 | $40 | $42 | $44 | $46 |
| 9.5% | $36 | $38 | $39 | $41 | $43 |
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 | Notes |
|---|---|---|---|---|---|---|
| AT&T | T | 10.5x | 6.2x | 8.0x | 5.0% | Higher debt, lower growth |
| T-Mobile US | TMUS | 20.0x | 11.5x | 18.0x | 1.5% | Growth leader, no dividend growth streak |
| Verizon (own history 5-yr) | VZ | 11.5x | 7.0x | 9.5x | 5.8% | 5-yr average |
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 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 |
|---|---|---|---|---|---|
| 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 |
|---|---|---|---|---|
| Jonathan Kees | Daiwa Capital | Strong Buy | $58 | +25.1% |
| Michael Rollins | Citigroup | Strong Buy | $55 | +18.6% |
| Maher Yaghi | Scotiabank | Buy | $55 | +18.6% |
| Sebastiano Petti | JP Morgan | Hold | $49 | +5.6% |
| Kannan Venkateshwar | Barclays | Hold | $47 | +1.3% |
💡 Investment Thesis
- 6.1% yield with 21-year growth streak: VZ is an income investor's anchor. 2% dividend growth + 6.1% yield = 8% total return.
- FCF comfortably covers dividend: FCF/share $4.76 vs. $2.83 DPS = 59% FCF payout ratio. The dividend is safe.
- Deleveraging progress: Net debt has been declining since the C-band purchase. Debt/EBITDA ~3.2x — manageable.
- Subscriber pressure: Wireless market is saturated. VZ lost postpaid phone subs in some quarters. Price wars with T-Mobile are a real risk.
- 5G monetization uncertain: VZ has invested $100B+ in 5G/fiber, but revenue growth remains below 3%. The payoff is taking longer than expected.
👔 Management Quality & Culture
CEO: Not identified
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.
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
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
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
Verizon Strengthens Executive Leadership to Drive Post-Acqui
Alongside the leadership changes, ... performance trajectory. The company emphasized its continued focus on operational efficiency, customer value, and disciplined capital allocation....
Alongside the leadership changes, ... performance trajectory. The company emphasized its continued focus on operational efficiency, customer value, and disciplined capital allocation....
Employee Ratings
Overall Rating
3.8/5 ★★★★☆
Reviews
32,491
Culture Signal
Positive
✅ Strengths
- work-life balance
- good pay
- recommend
⚠️ Concerns
- layoffs
- morale
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: $46.38 | Analyst Avg PT: $50.17
$47
🔴 Bear
$54
📊 Base
$63
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$50 | Begin position |
| Tier 2 — Add | ≤$50 | Add on weakness |
| Tier 3 — Full | ≤$44 | Full allocation |
| Sell Alert | ≥$62 | 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: Strong Buy. The current price of $46.38 sits at or below the bear-case value of $47, implying an unusually favorable downside/upside setup. Tier 1 begins at or below $50, with full allocation reserved for $44 or better.
📂 Current Position Summary
| Metric | Value |
|---|---|
| Shares Held | 128 |
| Average Cost Basis | $39.62 |
| Current Market Value | $5,937 |
| Unrealized P&L | $+865 (+17.1%) |
| Annual DPS | $2.830/yr |
| Annual Dividend Income | $362/yr |
| Current Yield (at price) | 6.10% |
| Yield on Cost | 7.14% |
| vs Target (~$200K) | $5,937 / $200,000 (3%) |
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| Ke Floor | CAPM Ke = 4.25% + 0.21 × 5.5% = 5.4%. This is too low — VZ carries real competitive and regulatory risk. Applied a floor Ke of 7.5% to produce valuations aligned with analyst PTs. |
| Model Selection | 3-Stage DDM — VZ is a high-payout telecom (68% payout) with a 21-year dividend growth streak. DPS is the natural valuation anchor. FCF also covers dividend comfortably. |
| Growth Calibration | VZ has grown dividends at ~2%/yr for the last 5 years. Stage 1 Base at 2.5% reflects modest acceleration from 5G/broadband. Analysts see EPS growth of 25% in 2026 (off 2025 base) normalizing to 7% thereafter — EPS growth is faster than DPS growth, implying payout ratio expansion. |
| Debt Overhang | Net debt ~$140B (3.2x EBITDA). Deleveraging is on track but slow. A recession could stall progress and threaten the dividend growth streak. |
| Sanity Check | Base DDM should produce IV in the $48-52 range to align with analyst consensus PT of $50.17. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.