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Verizon Communications (VZ) Stock Drops Despite Market Gains: Important Facts to Note

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The latest trading session saw Verizon Communications (VZ - Free Report) ending at $41.08, denoting a -0.53% adjustment from its last day's close. This change lagged the S&P 500's daily gain of 1.02%. On the other hand, the Dow registered a gain of 1.09%, and the technology-centric Nasdaq increased by 1.18%.

Shares of the largest U.S. cellphone carrier have appreciated by 2.18% over the course of the past month, underperforming the Computer and Technology sector's gain of 8.46% and the S&P 500's gain of 4.44%.

The upcoming earnings release of Verizon Communications will be of great interest to investors. The company's earnings report is expected on July 22, 2024. The company is forecasted to report an EPS of $1.15, showcasing a 4.96% downward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $33.07 billion, up 1.46% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $4.58 per share and revenue of $135 billion, indicating changes of -2.76% and +0.77%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Verizon Communications. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.29% decrease. Verizon Communications presently features a Zacks Rank of #3 (Hold).

From a valuation perspective, Verizon Communications is currently exchanging hands at a Forward P/E ratio of 9.02. For comparison, its industry has an average Forward P/E of 19.85, which means Verizon Communications is trading at a discount to the group.

It is also worth noting that VZ currently has a PEG ratio of 3.76. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Wireless National industry currently had an average PEG ratio of 3.55 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 79, positioning it in the top 32% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.


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