The Verizon story

What drives the business

• Verizon's core business is recurring connectivity service, with Consumer generating $106.8 billion, approximately 77% of consolidated revenue, in 2025 and approximately 116 million wireless retail connections at December 31, 2025.
• Business generated $29.1 billion in revenue in 2025 through wireless, broadband, corporate networking, security and managed services for companies, government customers and carriers.
• The January 2026 acquisition of Frontier expanded Verizon's fiber broadband footprint to 31 U.S. states and Washington, D.C., while an October 2025 commercial fiber arrangement with an affiliate of Tillman Global Holdings added another route to expanding fiber access.
• Under Dan Schulman, appointed chief executive in October 2025, Verizon is emphasizing Simplicity plans, Verizon One combined offerings and customer loyalty while reducing device subsidies and customer acquisition and retention costs.
• Broadband expansion produced 348,000 net additions in the quarter to June 2026, including 193,000 fixed wireless access and 155,000 fiber broadband net additions, bringing fixed wireless access and fiber broadband connections to approximately 17.1 million.

What the price assumes

At $46.68, the reverse DCF implies annual growth of -2.9% in free cash flow after stock pay for ten years, using a 10.2% discount rate.

That implied contraction compares with delivered annual growth of 0.5% over the last 10 years and the TenQ check's annual growth bar of 2.2%.

The 11.1% free cash flow yield nevertheless falls below Verizon's historical 12.9%, so the price implies cash contraction without meeting the check for a better cash yield than its own history.

Value VZ on your own assumptions

What could change the story

• Competition from AT&T, T-Mobile, cable operators and other connectivity providers could make Verizon's effort to gain and retain customers with fewer subsidies harder to sustain.
• The service improvement has not yet translated into broad revenue growth, with revenue rising 1.4% over the last twelve months and only 0.3% a year over the last three years, failing both sector growth checks.
• Reported earnings also diverged from adjusted results in the quarter to June 2026, as net income declined 22.9 percent to $3.9 billion, primarily because of $1.8 billion in pretax special items.
• Total debt of $165.2 billion against $1.8 billion in cash and short-term investments leaves financing flexibility important, while Verizon fails TenQ's liquidity, debt burden and interest coverage checks.
• Frontier integration and the broader business transformation carry execution risk, and Verizon's 8.2% return on capital employed falls below the TenQ check's 10.0% bar.

What to watch next

• The next service revenue readings will test Verizon's expectation that mobility and broadband service revenue growth approaches 3.0 percent in the third quarter of 2026 and approximately 4.0 percent in the fourth quarter, while wireless service revenue remains approximately flat for 2026.
• Phone additions, customer churn and average service revenue per account will show whether the reduced subsidy approach supports Verizon's expectation for 2026 postpaid phone net additions in the upper half of the 750,000 to 1.0 million range.
• Cash generation, network spending and debt balances will show how Verizon balances its 2026 guidance for free cash flow growth of 9.0 to 10.0 percent and capital expenditures of $16.0 billion to $16.5 billion with shareholder distributions.

Sources

• Verizon's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The VZ stock report, for every figure and check