Telecommunications Services · NYSE
Current Price
$46.61
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Verizon Communications Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Verizon Communications Inc., through its subsidiaries, offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. Its Consumer segment provides postpaid and prepaid service plans; internet access on notebook computers and tablets; wireless equipment, including smartphones and other handsets; and wireless-enabled internet devices, such as tablets, and other wireless-enabled connected devices comprising smart watches. It also provides residential fixed connectivity solutions, such as internet, video, and voice services; and sells network access to mobile virtual network operators. As of December 31, 2021, it had approximately 115 million wireless retail connections, 7 million wireline broadband connections, and 4 million Fios video connections. The company's Business segment provides network connectivity products, including private networking, private cloud connectivity, virtual and software defined networking, and internet access services; and internet protocol-based voice and video services, unified communications and collaboration tools, and customer contact center solutions. This segment also offers a suite of management and data security services; domestic and global voice and data solutions, such as voice calling, messaging services, conferencing, contact center solutions, and private line and data access networks; customer premises equipment; installation, maintenance, and site services; and Internet of Things products and services. As of December 31, 2021, it had approximately 27 million wireless retail postpaid connections and 477 thousand wireline broadband connections. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.
ROIC (TTM)
6.0%
ROE (TTM)
16.7%
FCF Yield
10.20%
Based on trailing twelve-month data, VZ shows a free cash flow per share of N/A and a ROIC of 6.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 10.20% are important context metrics when evaluating VZ's stock valuation relative to peers.
The intrinsic value of VZ depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether VZ is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $46.61. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Verizon Communications Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Telecommunications Services industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting VZ's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Verizon Communications Inc., this means projecting how much free cash flow the Telecommunications Services will produce over the next 5-10 years, then discounting those amounts to today's dollars. VZ's ROIC of 6.0% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For VZ, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
