Verizon Just Posted Its First Positive Q1 Postpaid Net Adds Since 2013, and the Stock Still Yields 6.3%

Key Fundamental Metrics for VZ Stock

• 52-Week Range: $38.39 to $51.68
• Current Stock Price: $45.37
• Street Consensus Target Price: ~$52
• Q1 2026 Mobility and Broadband Service Revenue: $22.9B (+1.6% YoY)
• Q1 2026 Adjusted EBITDA: $13.4B (+6.7% YoY, record high)
• Q1 2026 Adjusted EPS: $1.28 (+7.6% YoY)
• FY2026 Free Cash Flow Guidance: $21.5B or more
• Dividend Yield: 6.3% (20th consecutive annual increase)
• Mid-Case 10-Year Forward Stock Price Target: ~$83

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A Turnaround Hiding in Plain Sight: What Verizon’s Q1 Actually Showed

Verizon (VZ) is one of two dominant U.S. wireless carriers (along with T-Mobile), and it is not a growth company in the traditional sense. Revenue has been roughly flat for years at $138 billion. What makes the stock interesting right now has nothing to do with revenue growth and everything to do with what is happening beneath the surface.

The Q1 2026 headline was a number that hadn’t appeared in over a decade. Verizon posted positive postpaid phone net adds in the first quarter for the first time since 2013, adding 55,000 subscribers in a quarter that historically runs negative.

Postpaid phone churn came in at 0.90%, down five basis points sequentially. CEO Dan Schulman described the results as evidence that the turnaround is gaining momentum, driven by healthier customer economics and lower acquisition costs.

The Frontier acquisition closed on January 20, bringing Verizon’s fiber footprint to approximately 30 million locations. Management expects at least $1 billion in run-rate cost synergies by 2028 and plans to repay substantially all of Frontier’s debt by year-end.

Revenue has been stable while gross margins have expanded from around 58% to nearly 60% over five years.

A business at this scale with nearly 60% gross margins is not in trouble. It is a utility-scale asset that over-invested in promotions for several years and is now harvesting the results of a more disciplined approach.

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Record EBITDA, a Guidance Raise, and $5.4 Billion Returned to Shareholders in One Quarter

Overall, Q1 2026 delivered Verizon’s highest-ever reported adjusted EBITDA at $13.4 billion, up 6.7% year over year. Adjusted EPS came in at $1.28, up 7.6%. Management raised full-year adjusted EPS guidance to around $4.95 to $4.99, up from the prior range of $4.90 to $4.95, and now expects postpaid phone net adds to land in the upper half of the 750,000 to one million full-year guidance range.

Free cash flow guidance of $21.5 billion or more for 2026 represents roughly 7% growth versus 2025. That cash flow funded $2.9 billion in dividends and $2.5 billion in share repurchases in Q1 alone, totaling $5.4 billion in shareholder returns in a single quarter. The full-year buyback target is at least $3 billion, layered on top of the 20th consecutive annual dividend increase of $0.07 per share annualized.

Net unsecured debt sits at $130 billion, with a leverage ratio of 2.6x adjusted EBITDA. That is elevated relative to Verizon’s historical range, reflecting the Frontier financing. Management is targeting a return to 2.0-2.25x leverage in 2027, with Frontier debt paydown as the primary mechanism.

Normalized EPS declined from $5.39 in 2021 to a trough of $4.59 in 2024 as the company absorbed heavy promotional spending and network investment costs. The recovery has begun, reaching $4.71 in 2025 and guided to around $4.97 in 2026.

Street estimates project continued improvement toward $5.27 in 2027 and $5.75 in 2028 as Frontier synergies accumulate and the promotional environment normalizes. At the current stock price of $45.37, investors are buying that EPS recovery at roughly 9x forward earnings while collecting a 6.3% dividend yield.

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What the TIKR Valuation Model Says About VZ at $45

TIKR’s mid-case valuation model targets around $83 for VZ over a roughly nine-year horizon, implying a total return of around 82% or about 7% annualized. The model assumes revenue growing at around 2% annually, net income margins expanding to around 16%, and EPS growing at roughly 3% per year.

The low case is around $69, and the high case is around $95, and when you layer the 6.3% dividend yield on top of the mid-case price appreciation, the total annualized return picture becomes more compelling than the stock price alone suggests.

The Street consensus target of around $52 implies about 15% upside from current levels on price alone, which, combined with the yield, puts the one-year total return thesis closer to 20%.

The key assumption in the model is whether the Frontier synergies and subscriber recovery translate into durable EPS growth over the next several years. The mid-case assumes they do, at a measured pace.

What the Bulls Are Betting On

• The postpaid inflection is real and early. Positive Q1 net adds, for the first time since 2013, signal that customer economics have genuinely improved. If churn continues falling by even a few basis points per quarter, the cumulative subscriber gains compound meaningfully over time.
• Frontier transforms the broadband competitive position. Thirty million fiber passings give Verizon a credible bundled wireless-and-fiber offering in markets where it previously had no fixed-line presence, directly targeting AT&T’s convergence strategy.
• The dividend is among the safest in large-cap telecom. With $21.5 billion in free cash flow guidance, including roughly $11.5 billion in annual dividends, the free cash flow payout ratio is well under 60%. Twenty consecutive years of increases reflect a genuine commitment.
• The valuation is genuinely inexpensive. At roughly 9x forward earnings and 7x NTM EV/EBITDA for a business with $138 billion in revenue and nearly 60% gross margins, the bar for disappointment is low.

What the Bears Are Watching

• $130 billion in net debt is not a small number. Even at 2.6x EBITDA, the absolute debt load means that any meaningful deterioration in EBITDA would simultaneously pressure both the balance sheet and the dividend.
• Revenue growth has been essentially zero for five years. The forward two-year revenue CAGR of around 2% is encouraging but modest, and it depends on Frontier contributing meaningfully. A slower integration would push that number lower.
• Competition from T-Mobile is relentless. T-Mobile has been the most consistent share gainer in wireless for nearly a decade. Verizon’s subscriber recovery is encouraging, but sustaining it against a competitor with structural cost advantages requires continued execution.
• The January network outage was a reminder of operational risk. The Q1 wireless service revenue growth was held back by 80 basis points due to customer credits from the outage. Network reliability is Verizon’s core brand promise, and visible failures are costly.

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Should You Invest in Verizon Communications?

Verizon is not a stock you buy for growth. It is a stock you buy for yield, stability, and the potential for a modest re-rating as evidence of a turnaround accumulates. The Q1 results provided the clearest signal yet that the subscriber trajectory has turned, that EBITDA can expand even on flat revenue, and that the Frontier integration is on track.

The TIKR mid-case of around $83, combined with a 6.3% annual yield, puts the total return potential over the next several years in territory that compares favorably with many higher-growth names that carry considerably more risk.

For income-oriented investors who believe the EPS recovery will continue and leverage will come down on schedule, the current price is a reasonable entry point. For those who need revenue growth to feel confident, Verizon will require patience, as the earnings trajectory may eventually reward.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!