- Verizon stock sinks as Q1 earnings see ebb in growth.
- Net new subscriber additions are beginning to wane compared with the previous year and quarter.
- Dow Jones surges 1.7% as the market looks forward to Tesla earnings.
- VZ stock breaks below the 200-day moving average.
Verizon (VZ) stock sold off on Tuesday after releasing first-quarter earnings in the premarket, quickly becoming the worst-performing member of the Dow Jones Industrial Average (DJI) in the process.
VZ stock lost about 3.2% at its lowest ebb but has risen on the wings of a general stock market rebound and sits 1.3% lower at the time of writing. The Dow has gained an impressive 1.7% at the same time as the market grows excited for Tesla (TSLA) earnings, which will be released after the Tuesday close.
Verizon managed to beat the Wall Street consensus on both the top line and bottom lines, however, the market focused on the drop in new phone and internet additions instead.
Verizon stock earnings news
Verizon shareholders are likely disappointed that the stock price was not rewarded for the most important quarterly results. But then again, the market is always forward-looking, and it only sees storm clouds.
Verizon reported adjusted earnings per share (EPS) of $1.19, compared to a consensus of $1.15. Likewise, revenue arrived at $33.5 billion, which was approximately $220 million ahead of consensus and up 1.5% from a year earlier.
So far, so good. But where investors drew back is the data surrounding new subscribers. Yes, they are still growing, but the growth rate has plunged.
For broadband internet, Verizon added 339K net new subscribers. It might sound good, but this was a 17% drop-off from the fourth quarter of last year and a 13% decline from the same quarter a year ago.
Likewise, Verizon only added 94K net new postpaid wireless business subscribers. This amounted to a 67% decline in net new additions QoQ and a 63% decline YoY. These declines in added subscribers would appear to tell us that US consumers are pulling back in a major way.
In a similar fashion and to round out our tale of negative growth prospects, wireless equipment revenue (largely phones, tablets and other connected devices) fell 28% from the last quarter.
Verizon management did confirm its 2025 outlook but added the telling exception that the outlook did not include the effects of President Donald Trump’s new tariff regime. It would seem this was added to let the market know that management has no clue what is coming next in their industry.
Verizon stock forecast
Verizon stock fell briefly below its 200-day Simple Moving Average (SMA). This is a bad sign for bulls since it means that this moving average will likely fold completely in future sessions. A break there means that VZ shares will likely sink to either the $40 psychological level or the medium-term support seen at $38.75.
Verizon stock will need to regain the $43 level that has acted as a first focus of resistance if it wants bulls to return to the fray. Telecom stocks like Verizon are normally seen as safer options during recessions. With none other than JPMorgan predicting that a recession is more likely than not, VZ shares should see buyers arrive to save it from any territory south of $38.75.
VZ daily stock chart
