QS Research · Michael Burry's Scion Capital analyst template · 2006
VERIZON COMMUNICATIONS INC (VZ)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -22% · upside +31%
Using the TTM to Sep 30, 2026 as the base, Verizon earns $16.42B net income and $48.59B EBITDA; at $45.69 that is 11.5x P/E and 7.1x EV/EBITDA, mid-pack against the peer set. The upside case applies T-Mobile's 15.1x P/E to $16.42B and is about +31%, while the downside case applies AT&T's 6.2x EV/EBITDA to $48.59B and is about -22%, so the base case is roughly today's price. The market is not missing a large mispricing: operating momentum is real, but the balance sheet, flat earnings history and competitive overhang cap the multiple. Per the valuation mode I use earnings, not FCF; FY2023's depressed $11.61B net income is not the base.
Key numbers
- Share price: $45.69
- Market cap: $189.37B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $139.39B
- EV / EBITDA (TTM): 7.1x
- P/E (TTM): 11.5x
The 15 boxes
- ✓ 1. Long-form business notes
Verizon is a two-segment connectivity utility: Consumer (FY2025 revenue $106.8B, ~77% of consolidated $138.19B) sells wireless, Fios fiber, FWA and wholesale network access to ~116M retail wireless connections; Business (FY2025 $29.1B, ~21%) sells mobility, IoT, security and managed networking, with Wholesale down to $2.0B. Revenue rose from $128.29B (FY2020) to $138.19B (FY2025) with the mix tilting to Consumer (69% to 77%), while Business revenue fell from $31.0B to $29.1B. The asset base was extended by fiber and fixed-wireless acquisitions closed in January 2026 (Frontier, Starry) and by a Q4 2025 workforce cut of more than 13,000 positions. FY2025 operating income was $29.26B and net income $17.17B, versus $28.80B and $17.80B in FY2020; operating cash flow, which carries installment device receivables, fell from $41.77B to $37.14B over the same span.
- ✓ 2. Competitive advantage
Verizon has scale — FY2025 revenue $138.19B and operating income $29.26B — but the sources document no durable advantage: the industry is "highly competitive", named rivals (AT&T, T-Mobile, Comcast, Charter) attack it with "aggressive pricing, promotions... in some cases specifically targeting our customers", and its own risk factors say AI investments may not "enable us to obtain or maintain a competitive advantage". The record is flat, not compounding: operating income went $28.80B (FY2020) to $29.26B (FY2025), dipping to $22.88B in FY2023, and net income ended lower at $17.17B than the $17.80B it started at. The only differentiation the company itself asserts is reputation and brands, with no number attached, while regulators and spectrum licenses are described as a constraint (some competitors face fewer regulatory constraints) rather than a moat.
- ✓ 3. 10-Q takeaways
The 10-Q for the quarter ended Sept. 30, 2026 shows revenue up 1.5% y/y to $34.313B, with Consumer +1.3% and Business +2.6%; operating expenses were down 0.2% to $25.663B. Net income was $5.320B in Q3 2026 versus $5.056B in Q3 2025, while nine-month net income fell to $14.415B from $15.160B amid special items including a $746M loss on disposition, $453M acquisition/integration charges, $397M severance and $258M asset rationalization. Capex guidance is $16.0-$16.5B for 2026; risk factors had no material changes.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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