Verizon Communications Inc

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VZ : NYSE : Technology
$45.295 up 0.26 | 0.57%
Today's Range: 45.01 - 45.38
Avg. Daily Volume: 1.52435E7
05/25/17 - 3:42 PM ET

Financial Analysis


VERIZON COMMUNICATIONS INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. VERIZON COMMUNICATIONS INC has weak liquidity. Currently, the Quick Ratio is 0.79 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 26.02% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)29814.032171.0
EBITDA ($mil)11240.011959.0
EBIT ($mil)7181.07942.0
Net Income ($mil)3450.04310.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)4307.05846.0
Total Assets ($mil)246731.0244587.0
Total Debt ($mil)116546.0109880.0
Equity ($mil)23493.018641.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin60.8760.8
EBITDA Margin37.737.17
Operating Margin24.0924.69
Sales Turnover0.50.54
Return on Assets4.977.34
Return on Equity52.2196.4
Debt Q1 FY17 Q1 FY16
Current Ratio1.020.71
Debt/Capital0.830.86
Interest Expense1307.01356.0
Interest Coverage5.495.86


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)4079.374076.29
Div / share0.580.57
EPS0.841.06
Book value / share5.764.57
Institutional Own % n/a n/a
Avg Daily Volume1.5631135E71.5641401E7

Valuation


HOLD. VERIZON COMMUNICATIONS INC's P/E ratio indicates a significant discount compared to an average of 36.56 for the Diversified Telecommunication Services industry and a significant discount compared to the S&P 500 average of 25.02. For additional comparison, its price-to-book ratio of 7.82 indicates a significant premium versus the S&P 500 average of 3.00 and a significant premium versus the industry average of 3.50. 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
VZ 15.01 Peers 36.56   VZ 10.82 Peers 7.79

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 significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
VZ 11.61 Peers 15.57   VZ 0.85 Peers 1.29

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 discount to its peers.

 

Discount. 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 trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
VZ 7.82 Peers 3.50   VZ -31.98 Peers 34.20

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 significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
VZ 1.49 Peers 10.05   VZ -6.21 Peers 2.53

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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