Why Has Verizon's Stock Price Been Dropping?

At the beginning of this article, I highlighted that VZ's stock price fell by -18.1% since I wrote my previous article for the company. In fact, Verizon's shares are down by an even more substantial -29.1% in the past one year. In the same time frame, the broader market as represented by the S&P 500 corrected by a milder -15.9%.

There are a few reasons for the drop in Verizon's stock price.

The first reason is that investors have lost confidence in VZ, as a result of the company's disappointing management guidance updates provided when it released its financial results for Q1 2022 and Q2 2022.

In late-April when Verizon reported its first-quarter earnings, the company highlighted that its full-year fiscal 2022 "wireless service revenue growth", "adjusted EBITDA growth", and "adjusted EPS" are expected to be "at the lower end of" its earlier guidance. When VZ announced its Q2 2022 results on July 22, 2022, it lowered its guidance for all the key metrics like top line, operating profit, and bottom line.

The second reason is that the market is concerned about the resilience of Verizon's revenue and earnings in an environment of weak economic growth and low consumer confidence.

Notably, VZ did mention at BofA (BAC) 2022 Media Communications & Entertainment Conference on September 8, 2022 that "we have to be mindful of our customers" with "the economic backdrop", as "they're feeling the pain in their monthly bill." Also, Verizon's peer, AT&T (T) also highlighted at the Goldman Sachs (GS) Communacopia + Technology Conference on September 12, 2022 that there was "some extension on payment cycles" for its subscribers, even though there is no "further deterioration of what we saw earlier in the year."

The third reason is that Verizon has been ceding ground to the company's rivals.

According to a MoffettNathanson sell-side research report cited in an August 12, 2022 Fierce Wireless article, VZ "has lost market share in every quarter since the second quarter of 2020." This is a view validated by the operating metrics for Verizon. In the second quarter of 2022, Verizon achieved postpaid phone net additions of around +12,000. In contrast, AT&T delivered a much postpaid phone net additions figure of in excess of +800,000 in the most recent quarter.

In the subsequent section, I touch on Verizon's valuations in light of the company's share price drop for the last one year.

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19 replies (most recent on top)

i think the last time I gave Verizon any money, it was to use a payphone in 2001.

Sc--w Verizon.

I own a share of vz just to make those crooks spend money mailing me the annual report

Mostly because VZ has terrible marketing and pricing, always following TMO and AT&T, never leading of them following VZ. Does not matter how good the company is when the other guy is beating you on price.

Verizon has fallen out of favor with wall street. Why? Because Verizon has flat out lied and wall street has had enough of their cr-p. With $136B of debt, look for VZ to go belly up within five years.

We should all do like Pelosi and feed our spouse intel so they can make a ki----g in the market and get rich that way. It worked for the Kennedys too so why not us.

why does anything in the stock market do anything

These guys just rehashing what they read. Pointless and boring with no new insight.

If you haven't been paying attention, the country is in a recession and the market as a whole is crashing. Verizon's drop mirrors the market. The only reason T-Mobile hasn't dropped as much as they just came off a merger.

T-Mobile merged with Sprint, priced aggressively to build market share, and most importantly, improved its network.

“TMUS 5g network is probably 18 months ahead of AT&T and Verizon's, if not a little more,” says Keith Snyder, an industry analyst at CFRA. “[AT&T’s and Verizon’s] balance sheets are bad. Those two companies combined have about $300 billion that they need to get off their balance sheet at some point. Meanwhile, they need to spend very heavily on network deployments and new spectrum.”

Barron’s recently pointed out that T-Mobile has a bigger market cap ($177 billion) than Verizon ($173 billion) or AT&T ($119 billion). True, both Verizon and AT&T are more leveraged, so that the overall enterprise value of the two older companies is bigger. But the fact remains that T-Mobile stock has trounced Verizon and AT&T — and the market — over the past five years.

Because it has employees like the OP that can not see the obvious...and asks silly questions

5g will pay off soon. You’ll see.

@1vqu+1jdt0tYt That’s right homie. Let Valhalla know they ain’t nothing compared to Garden City!

Garden City will save this company!!

Verizon is going down. Aint nothing nobody can do about it. It's just a horrible, dysfunctional dumpster fire. May have the worst c-suite in all of corporate america. Way over staffed, FCF is deteriorating more every quarter. Bottom line is that Hans just doesnt care anymore.

@1osd+1jdt0tYt Don’t be hatin on the ‘former’ Valhalla’ we need new hires like pen meets paper. We at it again!! Spread the word! I need a pension also. One!

We Love our Valhalla, we will still be here after all of you are dead and gone. Gotta love it!

@1dlc+1jdt0tYt Another lame, boring over the top response stating nothing. Go back to Valhalla and cry about new hires and how management is a bunch of hateful mo--ns. That’s at least more interesting than your nonsensical drivel. Garden City Gangsters reppin 4 life.

Why are so many VZ employees so delusional?
Verizon has run its course, never to return to the leading company in mobility. Believe me when I tell you, it's a lot easier to maintain the top position than it is to lose it and try to regain it!
We had our chance, it's over!

“Because we have had bad leaders!” YW

You have no idea how to read a PnL. give up.

Wow, we have amazing insight here. You must be a financial guru. The whole market is down, including VZ. Let me guess, you’re from Valhalla and upset about no new hires also? You should have sold that vz stock when they first gave us the opportunity. Bunch of clowns giving terrible advice. Maybe the culture club can give you some financial advice instead of a party.

Because Verizon is an awful company that people steer clear from.

I'll put it this way, if the only two choices were a Verizon cell phone, or no cell phone at all, I'll pick having no phone at all. And I know a bunch of others who feel likewise.

Verizon has spent literal decades building this reputation.

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Why Has Verizon's Stock Price Been Dropping?

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