Verizon Communications Inc. (VZ) Intrinsic Value & DCF Valuation
Telecommunications Services · NYSE
Current Price
$49.45
Intrinsic Value
$66.69
+25.9% margin of safety
What Is Verizon Communications Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Verizon Communications Inc. (VZ) at $66.69 per share, compared with a market price of $49.45, a margin of safety of +25.9%. The base case assumes 7.0% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $49.35 to $86.9. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Verizon Communications Inc. (VZ) Undervalued?
At $49.45, VZ trades about 25.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Extensive Fiber Network
Verizon possesses a vast and robust fiber optic network, crucial for high-speed data transmission. This infrastructure underpins its ability to serve enterprise clients and support emerging AI demands.
↑Brand Recognition and Scale
As a leading telecommunications provider, Verizon benefits from strong brand recognition and a massive customer base. This scale provides significant operational efficiencies and market leverage.
↑Enterprise Relationships
The company has established deep relationships with large enterprise clients, including hyperscalers like Google. These partnerships are vital for its future growth in AI infrastructure services.
INVESTMENT RISKS
↓Significant Debt Load
Verizon carries a substantial amount of debt, which can increase financial risk, especially in a rising interest rate environment. This debt may limit its ability to invest in new growth areas.
↓Regulatory Scrutiny
The telecommunications sector is subject to significant government regulation. Changes in regulations regarding pricing, spectrum allocation, or net neutrality could negatively impact Verizon's operations.
↓Technological Disruption
While Verizon is investing in AI, the rapid pace of technological change, including advancements in satellite internet and alternative communication methods, poses a long-term threat to its traditional business model.
Base case
VZ base case valuation
Intrinsic Value
$66.69
Margin of safety
+25.9%
Expected annual return
+6.2%
Base case assumptions: 7.0% annual growth, 10.0% discount rate, 9.64x exit multiple, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the VZ valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Verizon Communications Inc. respond.
Open DCF Calculator for VZCompany Overview
Verizon Communications Inc. operates as a prominent global provider of diverse communication, technology, information, and entertainment solutions, catering to individuals, enterprises, and government entities worldwide through its various divisions. Its Consumer segment focuses on individual customers, supplying a broad spectrum of mobile service options, including both subscription-based (postpaid) and pay-as-you-go (prepaid) plans. This segment also facilitates internet access for portable devices such as laptop computers and tablets, and offers a variety of wireless hardware, ranging from smartphones and traditional mobile handsets to advanced wireless-enabled gadgets like tablets and smartwatches. Additionally, it delivers essential residential fixed connectivity services, which encompass internet, television, and voice communication. Verizon also extends its network capabilities by providing access to mobile virtual network operators. As of December 31, 2021, this segment reported approximately 115 million wireless retail connections, 7 million wireline broadband connections, and 4 million Fios video connections. The company's Business segment is dedicated to providing enterprise-level solutions. It offers comprehensive network connectivity products, including private networking, private cloud integration, virtual and software-defined networking, and high-speed internet access services. This segment further delivers sophisticated internet protocol-based voice and video communication tools, unified communications and collaboration platforms, and specialized customer contact center solutions. Beyond core connectivity, it provides a suite of managed services and data security offerings. Its extensive portfolio also covers domestic and international voice and data services, such as calling, messaging, conferencing, advanced contact center functionalities, and dedicated private line and data access networks. Moreover, the Business segment furnishes customer premises equipment, along with essential installation, maintenance, and on-site support services, and a wide array of Internet of Things (IoT) products and services. By December 31, 2021, this segment had approximately 27 million wireless retail postpaid connections and 477 thousand wireline broadband connections. Verizon Communications Inc. was incorporated in 1983 and holds its corporate headquarters in New York, New York. The company, which was originally known as Bell Atlantic Corporation, officially adopted its current name in June 2000.
Financial Metrics — VZ Stock Valuation Data
Revenue/Share (TTM)
$33.32
FCF/Share (TTM)
$5.14
ROIC (TTM)
5.8%
ROE (TTM)
15.5%
P/FCF
9.6x
EV/EBITDA
8.2x
FCF Yield
10.38%
Debt/Equity
1.81x
Based on trailing twelve-month data, VZ shows a free cash flow per share of $5.14 and a ROIC of 5.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 9.6x and FCF yield of 10.38% are important context metrics when evaluating VZ's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of VZ?
Verizon Communications Inc. currently generates $5.14 in free cash flow per share. At the current price of $49.45, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is VZ undervalued?
VZ trades at a P/FCF ratio of 9.6x with a free cash flow yield of 10.38%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether VZ is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value VZ stock using DCF?
To perform a DCF valuation on Verizon Communications Inc.: (1) Start with the trailing free cash flow per share ($5.14) 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 — with a debt-to-equity of 1.81x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to VZ?
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 company will produce over the next 5-10 years, shaped by Telecommunications Services trends, then discounting those amounts to today's dollars. VZ's ROIC of 5.8% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect VZ stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For VZ, with a debt-to-equity ratio of 1.81x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 8.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See VZ PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Communication Services valuationsDCF and P/E value VZ with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.