Today's Pre-Market Laggard Is Verizon Communications (VZ)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Verizon Communications ( VZ) as a pre-market laggard candidate. In addition to specific proprietary factors, Trade-Ideas identified Verizon Communications as such a stock due to the following factors:

  • VZ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $659.8 million.
  • VZ traded 726,546 shares today in the pre-market hours as of 8:33 AM.
  • VZ is down 2.2% today from yesterday's close.

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More details on VZ:

Verizon Communications Inc., through its subsidiaries, provides communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The stock currently has a dividend yield of 4.5%. VZ has a PE ratio of 21. Currently there are 17 analysts that rate Verizon Communications a buy, 1 analyst rates it a sell, and 6 rate it a hold.

The average volume for Verizon Communications has been 14.9 million shares per day over the past 30 days. Verizon has a market cap of $200.7 billion and is part of the technology sector and telecommunications industry. The stock has a beta of 0.58 and a short float of 1.8% with 5.09 days to cover. Shares are up 5% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Verizon Communications as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • VZ's revenue growth has slightly outpaced the industry average of 2.2%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Diversified Telecommunication Services industry average. The net income increased by 6.9% when compared to the same quarter one year prior, going from $3,947.00 million to $4,219.00 million.
  • Net operating cash flow has increased to $10,169.00 million or 42.44% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 5.82%.
  • The gross profit margin for VERIZON COMMUNICATIONS INC is rather high; currently it is at 62.18%. Regardless of VZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, VZ's net profit margin of 13.19% compares favorably to the industry average.
  • VERIZON COMMUNICATIONS INC's earnings per share declined by 11.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, VERIZON COMMUNICATIONS INC reported lower earnings of $2.51 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $2.51).

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