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Can Verizon Stock Benefit From Frontier Communications Buyout?
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Verizon Communications Inc. (VZ - Free Report) recently announced that it had entered into a definitive agreement to acquire Frontier Communications Parent, Inc. (FYBR - Free Report) , the largest pure-play fiber provider in the United States. The deal, worth approximately $20 billion of enterprise value, is aimed at expanding Verizon’s fiber footprint across the nation, thereby accelerating its delivery of premium mobility and broadband services to current and new customers.
VZ’s Strategic Acquisition to Expand Footprint
Post-acquisition, Verizon will integrate Frontier’s state-of-the-art fiber network within its Fios network to boost its industry-leading portfolio of fiber and wireless assets. This will likely enable Frontier customers to have seamless access to Verizon’s premium mobility, home Internet, streaming and connected home offerings, along with premium business products like Verizon Business Complete.
Additionally, the combination of Frontier’s premium broadband with Verizon’s premium mobile offering is anticipated to improve the customer churn rate by approximately 50% for postpaid mobility. This, in turn, is expected to improve the revenues of the mobility division of Verizon.
Frontier currently derives more than half of its revenues from fiber goods that serves 2.2 million fiber subscribers across 25 states in the United States and has invested $4.1 billion to update and expand its fiber network. By the end of 2026, the company expects to build an additional 2.8 million fiber spots in addition to its current 7.2 million places, which will further expand Verizon’s fiber footprint across the nation.
How VZ Could Have Secured the Deal
With one of the most efficient wireless networks in the United States, Verizon continues to deploy the latest 4G LTE advanced technologies to deliver faster peak data speeds and capacity for customers, along with customer-focused planning, disciplined engineering and constant strategic investment. It has been aggressively forging ahead to expand its fiber optics networks to support 4G LTE and 5G wireless standards, as well as wireline connections.
Will VZ Stock Benefit From the Buyout?
Verizon is offering various mix and match pricing in both wireless and home broadband plans that has led to solid customer additions. The company has witnessed increased adoption of 5G devices and premium unlimited plans. Moreover, in the enterprise and wholesale business, Verizon is changing its revenue mix toward newer growth services like cloud, security and professional services.
With this buyout, the company expects to achieve a minimum of $500 million in run-rate cost synergies by the third year, backed by the increased scale, distribution and network integration. All these improvements will likely help the company to maintain a strong balance sheet and liquidity profile in the upcoming quarters.
VSAT’s Stock Price Performance
Shares of VZ have gained 20.8% over the past year compared with the industry’s growth of 35.1%.
Image Source: Zacks Investment Research
VZ Zacks Rank and Key Picks
VZ currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader industry have been discussed below.
Ubiquiti Inc. (UI - Free Report) carries a Zacks Rank #2 (Buy) at present, provides a wide range of networking products and solutions for service providers and enterprises. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last reported quarter, Ubiquiti delivered an earnings surprise of 4.19%.
Airgain, Inc. (AIRG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 35%.
Based in San Diego, CA, Airgain provides antenna products as integrated wireless solutions. These devices are designed to address vital connectivity requirements during product development and throughout the entire lifecycle of other industries, such as automotive and consumer, in addition to various sectors within an enterprise.
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Can Verizon Stock Benefit From Frontier Communications Buyout?
Verizon Communications Inc. (VZ - Free Report) recently announced that it had entered into a definitive agreement to acquire Frontier Communications Parent, Inc. (FYBR - Free Report) , the largest pure-play fiber provider in the United States. The deal, worth approximately $20 billion of enterprise value, is aimed at expanding Verizon’s fiber footprint across the nation, thereby accelerating its delivery of premium mobility and broadband services to current and new customers.
VZ’s Strategic Acquisition to Expand Footprint
Post-acquisition, Verizon will integrate Frontier’s state-of-the-art fiber network within its Fios network to boost its industry-leading portfolio of fiber and wireless assets. This will likely enable Frontier customers to have seamless access to Verizon’s premium mobility, home Internet, streaming and connected home offerings, along with premium business products like Verizon Business Complete.
Additionally, the combination of Frontier’s premium broadband with Verizon’s premium mobile offering is anticipated to improve the customer churn rate by approximately 50% for postpaid mobility. This, in turn, is expected to improve the revenues of the mobility division of Verizon.
Frontier currently derives more than half of its revenues from fiber goods that serves 2.2 million fiber subscribers across 25 states in the United States and has invested $4.1 billion to update and expand its fiber network. By the end of 2026, the company expects to build an additional 2.8 million fiber spots in addition to its current 7.2 million places, which will further expand Verizon’s fiber footprint across the nation.
How VZ Could Have Secured the Deal
With one of the most efficient wireless networks in the United States, Verizon continues to deploy the latest 4G LTE advanced technologies to deliver faster peak data speeds and capacity for customers, along with customer-focused planning, disciplined engineering and constant strategic investment. It has been aggressively forging ahead to expand its fiber optics networks to support 4G LTE and 5G wireless standards, as well as wireline connections.
Will VZ Stock Benefit From the Buyout?
Verizon is offering various mix and match pricing in both wireless and home broadband plans that has led to solid customer additions. The company has witnessed increased adoption of 5G devices and premium unlimited plans. Moreover, in the enterprise and wholesale business, Verizon is changing its revenue mix toward newer growth services like cloud, security and professional services.
With this buyout, the company expects to achieve a minimum of $500 million in run-rate cost synergies by the third year, backed by the increased scale, distribution and network integration. All these improvements will likely help the company to maintain a strong balance sheet and liquidity profile in the upcoming quarters.
VSAT’s Stock Price Performance
Shares of VZ have gained 20.8% over the past year compared with the industry’s growth of 35.1%.
Image Source: Zacks Investment Research
VZ Zacks Rank and Key Picks
VZ currently carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the broader industry have been discussed below.
Ubiquiti Inc. (UI - Free Report) carries a Zacks Rank #2 (Buy) at present, provides a wide range of networking products and solutions for service providers and enterprises. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the last reported quarter, Ubiquiti delivered an earnings surprise of 4.19%.
Airgain, Inc. (AIRG - Free Report) currently carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 35%.
Based in San Diego, CA, Airgain provides antenna products as integrated wireless solutions. These devices are designed to address vital connectivity requirements during product development and throughout the entire lifecycle of other industries, such as automotive and consumer, in addition to various sectors within an enterprise.