Verizon Wins Multiple 5G Network Awards: VZ Stock to Benefit?

Verizon Communications Inc. VZ recently achieved the top spot in the industry, winning the Best 5G, Fastest 5G and Most Reliable 5G carrier awards in the 2024 RootMetrics second-half drive tests carried across the country. The tests are deemed to be the nation’s most rigorous independent scientific study by Rootmetrics – a mobile analytics firm and a subsidiary of Ookla that tests network performance when consumers are using their mobile phones for voice or data communications.VZ Rides on Superior 5G AccoladesWith one of the most efficient wireless networks in the United States, Verizon delivers faster peak data speeds and capacity for customers, driven by customer-focused planning, disciplined engineering and steady infrastructure investments. The company achieved 874 Metro Area RootScore Awards, which was about 70% more than its closest competitor, marking its eighth consecutive national 5G reliability award. The appreciation underscored Verizon's unwavering commitment to providing customers with a superior 5G network experience.The company’s 5G network hinges on three fundamental drivers to deliver the full potential of next-generation wireless technology. These are massive spectrum holdings, particularly in the millimeter-wave bands for faster data transfer, end-to-end deep fiber resources and the ability to deploy a large number of small cells.Verizon is witnessing significant 5G adoption and fixed wireless broadband momentum with premium unlimited plans. The telecom giant plans to accelerate the availability of its 5G Ultra Wideband network across the country, with 280 million people currently having access to it. The company’s growth strategy includes 5G mobility, nationwide broadband and mobile edge compute and business solutions. The deployment of a cloud-native, container-based, virtualized architecture for higher flexibility, scalability and cost efficiency across its network is likely to benefit the company’s long-term growth. Mix-and-match pricing plans for wireless and home broadband have further led to solid customer additions.VZ to Boost Fiber Network InfrastructureVerizon has entered into a definitive agreement to acquire Frontier Communications Parent, Inc. FYBR, the largest pure-play fiber provider in the United States. The deal, worth approximately $20 billion of enterprise value, aims to expand Verizon’s fiber footprint across the nation, accelerating its delivery of premium mobility and broadband services to current and new customers.Post-acquisition, Verizon will integrate Frontier’s state-of-the-art fiber network within its Fios network to boost its industry-leading portfolio of fiber and wireless assets. Additionally, the combination of Frontier’s premium broadband with Verizon’s premium mobile offering is anticipated to improve the customer churn rate by approximately 50% for postpaid mobility. This, in turn, is expected to boost the revenues of the mobility division. Verizon expects to achieve a minimum of $500 million in run-rate cost synergies by the third year, backed by increased scale, distribution and network integration.Verizon has also expanded Fios Forward to support digital inclusion and provide opportunities for underserved households to thrive in the digital world. With no data caps, Fios customers can experience faster upload and download than comparable plans.Low Margins Dent VZDespite solid wireless traction, the company’s wireline division is struggling with persistent losses in access lines due to competitive pressure from voice-over-Internet protocol service providers and aggressive triple-play (voice, data, video) offerings by the cable companies. Moreover, to expand its customer base, Verizon is spending heavily on promotion and offering lucrative discounts, which are weighing on margins.VZ also recorded high capital expenditures to support the launch and continued build-out of its 5G Ultra Wideband network, deployment of significant fiber assets across the country and upgrade to Intelligent Edge Network architecture. The company has splurged in the C-Band auction, which is offering airwaves in the 3.7 gigahertz-to-4.2 gigahertz area of spectrum to acquire key mid-band spectrum for potential 5G deployments in the next few years. Unless the high auctioning expenses are justified, margins are likely to be compromised significantly.Moreover, the company operates in a competitive and almost saturated U.S. wireless market. Spectrum crunch has become a major issue in the country’s  telecom industry. Most carriers are finding it increasingly challenging to manage mobile data traffic and video streaming demand, which is growing by leaps and bounds.  In addition, Verizon is facing a steady decline in legacy services. The company registered 60,000 Fios Video net losses in the fourth quarter of 2024, reflecting the ongoing shift from traditional linear video to over-the-top offerings. Image Source: Zacks Investment ResearchPrice Performance of VZVZ has gained a mere 1% over the past year compared with the industry’s growth of 34.3%, lagging peers like AT&T Inc. T and T-Mobile US Inc. TMUS.One-Year VZ Stock Price PerformanceImage Source: Zacks Investment ResearchEstimate Revision Trend of VZEarnings estimates for Verizon for 2025 have declined 1.1% to $4.67 over the past year, while the same for 2026 has decreased 1.4% to $4.85. These portray bearish sentiments for the stock. Image Source: Zacks Investment ResearchEnd NoteBy investing steadily in infrastructure and pioneering new technologies, Verizon is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. This is likely to translate into solid subscriber growth, higher average revenue per user and increased broadband and fiber penetration.However, a saturated wireless market and price wars owing to competitive pressure have eroded its profitability. The marginal downtrend in estimate revisions further portrays skepticism about the stock’s growth potential. With a Zacks Rank #3 (Hold), Verizon appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis Report Frontier Communications Parent, Inc. (FYBR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks