Verizon Communications Inc.

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VZ : NYSE : Communications
$48.29 up 0.42 | 0.88%
Today's Range: 47.535 - 48.3
Avg. Daily Volume: 1.68942E7
02/23/18 - 4:00 PM ET

Financial Analysis

VERIZON COMMUNICATIONS INC's gross profit margin for the fourth quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. VERIZON COMMUNICATIONS INC has weak liquidity. Currently, the Quick Ratio is 0.77 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 91.33% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q4 FY17 Q4 FY16
Net Sales ($mil)33955.032340.0
EBITDA ($mil)9249.012010.0
EBIT ($mil)4793.08023.0
Net Income ($mil)18669.04495.0

Balance Sheet Q4 FY17 Q4 FY16
Cash & Equiv. ($mil)2079.02880.0
Total Assets ($mil)257143.0244180.0
Total Debt ($mil)117095.0108078.0
Equity ($mil)43096.022524.0

Profitability Q4 FY17 Q4 FY16
Gross Profit Margin55.3155.59
EBITDA Margin27.2337.13
Operating Margin14.1224.81
Sales Turnover0.490.52
Return on Assets11.75.37
Return on Equity69.8458.28
Debt Q4 FY17 Q4 FY16
Current Ratio0.910.87
Interest Expense0.01310.0
Interest Coverage0.06.12

Share Data Q4 FY17 Q4 FY16
Shares outstanding (mil)4079.04076.68
Div / share0.590.58
Book value / share10.575.53
Institutional Own % n/a n/a
Avg Daily Volume1.7641608E71.4798323E7


BUY. This stock's P/E ratio indicates a discount compared to an average of 15.47 for the Diversified Telecommunication Services industry and a significant discount compared to the S&P 500 average of 25.51. To use another comparison, its price-to-book ratio of 4.71 indicates a premium versus the S&P 500 average of 3.26 and a significant premium versus the industry average of 2.72. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, VERIZON COMMUNICATIONS INC seems to be trading at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
VZ 6.76 Peers 15.47   VZ 8.02 Peers 7.12

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

VZ is trading at a significant discount to its peers.


Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

VZ is trading at a premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
VZ 10.65 Peers 15.38   VZ NM Peers 1.58

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

VZ is trading at a significant discount to its peers.


Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

VZ's negative PEG ratio makes this valuation measure meaningless.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VZ 4.71 Peers 2.72   VZ 128.57 Peers 145.32

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

VZ is trading at a significant premium to its peers.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, VZ is expected to trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VZ 1.61 Peers 11.76   VZ 0.04 Peers 3.12

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

VZ is trading at a significant discount to its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

VZ significantly trails its peers on the basis of sales growth



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