Verizon Communications Inc. VZ is affected by weakness in the Business Segment, which primarily includes the wireless and wireline operations of wholesale, public sector and other, small and medium business, and global enterprise. During the second quarter, the company generated $7.27 billion in revenues from this segment, a decline from $7.3 billion a year ago. Growth in business markets and other revenues was offset by declining trends in the public sector and wholesale business. The figure fell short of our estimate of $7.29 billion.
During the second quarter, Verizon Business delivered 42,000 net adds compared with 135,000 net adds in the prior-year quarter and 67,000 net adds in the first quarter of 2025. Wireless retail postpaid churn was 1.61%, while retail postpaid phone churn was 1.26%. High churn rate is a concern.
Management expects demand softness in the public sector business will continue to impact Verizon’s Business segment in the second half of 2025 as well. Per our estimate, the company expects to generate $13.95 billion in revenues from the enterprise and public sector business, indicating a decline of 1.8% from the prior-year quarter’s figure of $14.2 billion.
How Are Competitors Faring?
Verizon faces significant competition from other industry leaders, including T-Mobile US, Inc. TMUS and AT&T, Inc. T. During the second quarter, T-Mobile reported 830,000 postpaid phone net customer additions with postpaid phone churn of 0.9%. This led to solid growth in postpaid revenues. However, the company’s wholesale and other service revenues decreased to $717 million from $938 million in the year-earlier quarter. Low churn rate remains one of T-Mobile's major advantages.
AT&T is facing a steady decline in linear TV subscribers and legacy services. Revenues from Business Wireline were down 9.3% year over year in the second quarter of 2025 to $4.31 billion, due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. The company reported 479,000 post-paid net additions with a churn rate of 1.02%.
VZ’s Price Performance, Valuation and Estimates
Verizon has gained 6.8% over the past year compared with the Wireless National industry’s growth of 21.4%.
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Going by the price/earnings ratio, the company’s shares currently trade at 9.11 forward earnings, down from 13.63 for the industry but above the stock’s mean of 9.01.
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Earnings estimates for 2025 and 2026 have improved 0.21% to $4.69 and 1.23% to $4.94, respectively, over the past 60 days.
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Verizon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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