Verizon earnings on deck: Can CEO turnaround deliver subscriber growth? By Investing.com

Verizon is expected to report Q1 EPS of $1.21 on revenue of $34.82 billion, with analysts still rating the stock a Buy and a mean price target of $51.58, or 9.4% upside from $47.22. The setup is mixed: fourth-quarter momentum was strong, but 60-day EPS estimates are down 1.2% and investors are questioning whether the new turnaround strategy can sustain subscriber growth while protecting margins. Focus will be on postpaid additions, wireless revenue trends, and whether cost cuts support the projected 7.5% EBITDA growth and $21.5 billion in free cash flow for 2026.

Analysis

The market is treating Verizon less like a cyclical earnings event and more like a credibility checkpoint for management. If the subscriber improvement persists, the multiple can re-rate quickly because the stock is already priced as a low-growth utility; but if net adds stall, the downside is asymmetric given how much of the current thesis depends on operating leverage rather than top-line growth. The key second-order effect is that a successful turnaround would force the market to take share-loss risk more seriously at AT&T, which still trades as the cleaner yield/value alternative in many portfolios.

The real variable is not this quarter’s EPS; it is whether Verizon can keep discounting rationally without reigniting a price war. If it holds the line on promotions, margins can improve even with flat service revenue, but that only works if churn stays contained—otherwise the company will have to choose between share and economics by mid-year. That makes the next two reporting cycles more important than Monday’s print: one clean quarter can validate the pivot, but two consecutive quarters of weak adds would likely reset 2026 estimates.

A contrarian read is that consensus may be underestimating how much of the easy margin gain is already in the numbers after workforce cuts and capex discipline. If EBITDA and FCF come in near plan, the stock may not need rapid revenue growth to work, just less bad execution than feared. The bigger risk is that a relatively small miss on guidance gets amplified because investors have been conditioned to expect a turnaround inflection that may still be 2-3 quarters away.

Key Decisions for Investors

• Buy VZ on a post-earnings dip only if management confirms subscriber momentum and no promotional escalation; target 8-12% upside over 3-6 months toward the low-$50s, with downside limited to ~5-7% if guidance holds.
• Use VZ May/June call spreads rather than outright stock if positioning for a confirmation trade; risk/reward is best if the stock re-rates on guidance, but theta decay is a real risk if the story remains 'show-me' for another quarter.
• Short T against long VZ on a 2-4 month horizon if VZ demonstrates better net adds and disciplined pricing; the pair benefits if market-share dynamics are turning, while neutralizing sector beta and dividend yield noise.
• If VZ misses on churn or guidance, fade the bounce and look for a short toward the forward P/E de-rating zone; the trade works because the valuation already embeds a successful turnaround, so any execution delay should compress multiples fast.
• Watch AT&T reactions closely after VZ prints; if VZ shows share gains without heavy discounting, T becomes the more vulnerable laggard and a relative short candidate into its next update.