Thinking about what to do with Verizon Communications stock right now? You are definitely not alone. A quick glance at the recent price action tells a story: after sliding 2.7% over the last week and dropping 10.0% for the last month, Verizon’s shares are firmly on many investors’ radars. While that might be discouraging for existing shareholders, the moves are reigniting interest among value seekers, especially since the stock has crept up 1.5% over the past year and posted a significant 28.5% gain in the past three years. Not all is rosy long term, as the five-year return stands at -8.4%, but that’s only half the picture.
Context matters, and recent news highlights Verizon’s continued investment in 5G network upgrades and renewed focus on postpaid subscriber growth, both essential for keeping up with fierce competition across the telecom sector. While these themes haven’t reversed the stock’s short-term trajectory just yet, they are reshaping how the market looks at Verizon’s risk and potential rewards.
If you are hunting for signs of value, here is the key point: Verizon scores a perfect 6 out of 6 on our latest undervaluation checks. That puts it at the top of the heap, but how reliable is that score and what does it actually mean for your investment decision?
Next, we will break down the traditional methods analysts use to assess Verizon’s value and provide a preview of a smarter way of answering whether it is time to buy, hold, or move on.
Why Verizon Communications is lagging behind its peers
Approach 1: Verizon Communications Discounted Cash Flow (DCF) Analysis
The Discounted Cash Flow (DCF) model calculates a company’s value by projecting its future cash flows and discounting them back to today’s dollars. This technique is widely used by analysts to estimate the true worth of a business like Verizon Communications in financial terms.
Right now, Verizon generates Free Cash Flow of approximately $15.3 billion annually. Analyst estimates suggest steady cash flow growth, with projections reaching over $24 billion by the end of 2029. While detailed forecasts are only available for the next five years, Simply Wall St extrapolates future cash flows for an additional five years to complete the valuation model. All cash flows are calculated in USD ($).
Based on these projections and using the 2 Stage Free Cash Flow to Equity model, Verizon’s estimated intrinsic value is $105.97 per share. This represents a 63.0% discount to the current share price. This suggests that the stock may be significantly undervalued based on future cash flow expectations.
Result: UNDERVALUED
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Verizon Communications.
VZ Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests Verizon Communications is undervalued by 63.0%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
Approach 2: Verizon Communications Price vs Earnings
The price-to-earnings (PE) ratio is the most widely used valuation multiple for profitable companies like Verizon Communications. It tells investors how much they are paying for every dollar of a company’s earnings, making it particularly useful when stable profits and cash flows are present.
Growth expectations and business risk both shape what a “normal” or “fair” PE ratio should be. Companies with faster earnings growth or lower risk profiles can justify higher PE multiples, while riskier or slower-growing firms generally command lower ratios.
Currently, Verizon trades on a PE ratio of 9.1x, which is notably lower than the telecom industry average of 16.7x and well below the broader peer group average of 22.3x. At first glance, this deep discount may signal an attractive value, but it also could reflect investor concerns about future prospects relative to peers.
This is where Simply Wall St’s proprietary “Fair Ratio” comes in. The Fair Ratio for Verizon is 15.6x. This figure blends not just industry averages, but also critical company specifics like earnings growth outlook, risk factors, profit margins, and market cap. Unlike a basic peer or industry comparison, the Fair Ratio provides a more meaningful benchmark tailored to Verizon’s circumstances.
Comparing Verizon’s current PE of 9.1x to its Fair Ratio of 15.6x shows the shares look significantly undervalued using this metric as well.
Result: UNDERVALUED
NYSE:VZ PE Ratio as at Oct 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Verizon Communications Narrative
Earlier we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your story for a company, connecting your own perspective on its business, such as how much future revenue, earnings, and margins you expect, to a set of financial forecasts and, ultimately, a fair value estimate.
With Narratives, you go beyond just crunching numbers and start framing Verizon Communications’ future around real-world events, risks, and opportunities that matter most to you. This approach, available to millions of investors on Simply Wall St’s platform via the Community page, enables you to see exactly how your assumptions would affect fair value and helps you clearly compare that figure to the current share price. This makes buy, hold, or sell decisions more transparent and grounded in your personal outlook.
Narratives are updated dynamically as news breaks or earnings roll in, so your view and fair value estimate always reflect the latest developments. For example, some investors are optimistic about Verizon’s 5G expansion and see a fair value as high as $58.00. Others worry about debt and slow market growth, assigning a lower fair value near $42.00. With Narratives, you can align your investment strategy with your own convictions and react quickly as the facts change.
Do you think there’s more to the story for Verizon Communications? Create your own Narrative to let the Community know!
NYSE:VZ Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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