Is Verizon Communications Inc (VZ) overvalued?
On Equity Rank's model estimate, VZ trades close to its fair value (3% below it). Verizon Communications Inc (VZ) last closed at $45.69; the multi-method model fair value is $47.11.
| Price | Model fair value | Price vs model |
|---|---|---|
| $45.69 | $47.11 | 3% below |
What the answer rests on
- 8 of 12 valuation methods put VZ's value above its price and 4 put it below, so the methods disagree.
- To justify today's price, VZ's free cash flow would need to grow about -10.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 23.7% a year.
- VZ trades at 11.8 times its last year's earnings, against a median of 14.5 for 21 profitable Communication Services companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 46% below to 2% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind VZ's fair value · What prices assume · Other companies