VZ Stock: Verizon Q4 Earnings Preview

Introduction

Verizon [VZ] has had a rough ride over the last few years, with the stock failing to convincingly recover from major dips in 2023.

Could its Q4 2024 earnings call on January 24 mark the start of a turnaround for the telecommunications giant?

What’s New for Verizon?

As of January 21, Verizon is the world’s third-largest telecommunications firm by market cap. Despite its prominence, the company has struggled with an eye-watering twelve-figure debt, and VZ stock’s price has reflected these struggles.

That said, the firm is making progress with its debt, having announced the results of its tender offers for six series of debt securities on December 10.

Interestingly, some analysts are starting to suggest Verizon could be an underplayed artificial intelligence (AI) name, specifically looking at its expansion of 5G technology.

The company is set to collaborate with Nvidia [NVDA] to deliver AI solutions to dedicated private networks; a big-name example in the pipeline is the FIFA Men’s World Cup in 2026.

Potential Growth on the Horizon 

VZ’s share price was relatively flat for the 12 months to January 17’s close, following a turbulent final couple of months in 2024.

The year’s modest peak for the year came on October 1, before it fell 9.24% to November 12. Another rise and fall before the year closed left the stock in pretty much the same position it started in.

There is potentially reason for hope following a slight uptick between January 10 and 17 this year — VZ rose 2.57% in that time.

Investors might be wondering whether this could be the beginning of a wider correction, triggered by recognition of the company’s AI potential.

Whether or not this proves to be the case may be decided by the stock’s Q4 earnings, released on January 24.

How Is VZ Measuring Up to the Competition?

The telecommunications space is dominated by global names, including AT&T [T] and ATN International [ATNI]. While both T and VZ have beaten or met all 2024 earnings estimates announced so far, ATNI has missed two out of three — Q1 and Q3, by $0.36 and $2.10, respectively.

How does VZ match up to the competition more broadly?

Source: Yahoo Finance

Verizon has marginally better growth prospects than its immediate competitors — and given the challenge growth can present for incumbents in the telecommunications space, any prospect might be worth paying attention to.

AT&T has been making a lot of noise about AI since the so-called revolution began, but none of it is particularly groundbreaking. For instance, their GenAI Year Two update back in September 2024 focused on ways they are applying a chatbot in their customer service team.

VZ Stock: The Investment Case

Investors looking to expand into the telecommunications space might be considering VZ – so what are the bear and bull cases for the stock?

The Bull Case for VZ

For the first time in some months, analysts are becoming more positive in their outlook for Verizon.

Verizon has struggled to excite investors in recent years. However, this could change if the hype surrounding the 5G takeoff in 2025 proves justified.

If it does, VZ could be well-positioned to take large chunks of newly created market share. This could be especially promising considering some of the partnerships and products Verizon has in its pipeline.

Alongside the potential business wider 5G/AI integration could bring — something Verizon is actively working to compound through partnerships and expansions — the firm is expecting 5G business services using private network links to pick up in 2025.

It has already confirmed partnerships with some big names, including Amazon [AMZN] and IBM [IBM].

The Bear Case for VZ

While there are certainly some positives on the play sheet for Verizon, the fundamentals continue to look somewhat shaky. What are the potential headwinds for VZ stock?

Verizon is making moves to actively manage its debt, but it is difficult to ignore a figure that runs into the hundreds of billions.

Investors might rather look to younger growth companies, with less around their neck. This is especially true given the unpredictability of interest rates in light of the incoming Trump administration, among other factors.

The fundamentals are also working against Verizon at the moment. It has been trading below its 50- and 200-day moving average for more than half of the last six months.

More technical investors may argue VZ needs to form a base in order to be actionable — could a positive Q4 earnings report be the start of this rally?

Conclusion

Verizon is certainly in for an interesting few months. Q4 earnings on January 24 will likely set the tone.