Shares of Verizon (VZ) gained in trading after the company’s wireless subscribers hit a five-year high and the company reported strong Q4 results. The telecommunication giant reported adjusted earnings of $1.10 per share, compared to $1.08 in the same period last year. This was above consensus estimates of $1.09 per share.
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Furthermore, the company’s revenues increased by 1.6% year-over-year to $35.7 billion in the fourth quarter. This surpassed Street estimates of $35.3 billion.
VZ’s MyPlan Boosts Wireless Revenue
The company’s wireless service revenues grew by 3.1% year-over-year to $20 billion driven by a hike in prices, and the popularity of its MyPlan service. It is a customizable mobile service plan designed to give customers more flexibility and control over their wireless service and allows customers to add optional features, or “perks”, such as streaming services like Hulu at an extra cost.
This business saw Q4 postpaid phone net additions of 568,000, a surge of 26.5% year-over-year and higher than analysts’ estimates of 487,500 additions.
VZ Boosts Broadband and 5G with Strategic Moves
When it comes to Verizon’s broadband business, the company’s broadband connections increased by 15% year-over-year to more than 12.3 million with net additions of 408,000 in the fourth quarter. Furthermore, Verizon has heavily invested in the C-band spectrum, valued for its balance of speed and range, to enhance its 5G services and outpace AT&T (T) and T-Mobile (TMUS). This spending aligns with its goal of adding up to 9 million fixed wireless subscribers by 2028.
In fact, in Q4, the company grew its base of fixed wireless subscribers to nearly 4.6 million. In addition, the company unveiled AI Connect, a suite of solutions to help businesses manage AI workloads at scale, tapping into the technology’s rapid growth.
VZ Issues FY25 Guidance
Looking ahead, the company expects total wireless services revenue to grow in the range of 2% to 2.8% while adjusted earnings are likely to stay flat or rise by 3% year-over-year. For reference, analysts were expecting its earnings to grow by 2.7% year-over-year.
What Is the Prediction for Verizon Stock?
Analysts remain cautiously optimistic about VZ stock, with a Moderate Buy consensus rating based on three Buys and six Holds. Over the past year, VZ has increased by 1.3%, and the average VZ price target of $45.25 implies an upside potential of 15.5% from current levels. These analyst ratings are likely to change following VZ’s results today.
