Heres Why Verizon Stock Might Not Rise Much From Here

By Trefis3 days ago

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Verizon stock (NYSE: VZ) saw a 5.4% increase in the last one month (21 trading days) and it now trades at $59 per share. This rise in the stock was driven by recovery in the companys business from the pandemic impact, which was reflected in 2.2% growth in its wireless service revenue in 2020, which is the largest revenue segment for Verizon (contributing $16.7 billion to total revenue of $34.7 billion in Q4 2020). Wireless service revenue is expected to grow another 3% in 2021 led by higher-priced unlimited plans. The companys plan to add homes and businesses at a faster rate to its 5G network in the coming quarters is likely to fuel healthy growth in the wireless service business. Verizon expects to provide 5G service to 15 million homes in the U.S. by end of 2021. Thus, anticipation of faster 5G expansion and growth in wireless business has led to an uptick in the stock in the last month.

That is on a standalone basis. But, Verizon is still far behind its close rivals in adding new postpaid phone customers (most valuable for a telecom company). To put things in perspective, Verizon added 279,000 new postpaid phone customers in Q4 2020, much lower than AT&Ts 800,000 and T-Mobiles 824,000. With Verizon lagging its close rivals, will VZ stock continue to register healthy returns or see some correction in the next few months? According to the Trefis Machine Learning Engine, which identifies trends in a companys stock price data for the last ten years, returns for VZ stockaverage close to 1.1%in the nextthree-month (63 trading days)period after experiencing a 5.4% rise over the previous one-month (21 trading days) period. Notably, though, the stock is likely tounderperformthe S&P500 over the next three months, with an expected return which would be5% lower compared to the S&P500.

But how would these numbers change if you are interested in holding VZ stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test VZ stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just one day!

MACHINE LEARNING ENGINE try it yourself:

IFVZ stock moved by -5% over five trading days,THEN over the next 21 trading days, VZ stock moves an average of 3.5 percent, which implies a return which is almost in line with that of the S&P500.

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