Verizon (VZ) Stock Faces Margin Squeeze As 11.6% Net Profits Challenge Bullish Narrative

Verizon Communications (VZ) opened Q2 2026 with total revenue of US$34.3 billion and basic EPS of US$0.92 on net income of US$3.8 billion, setting a clear snapshot for how the business is currently earning its cash. Over recent quarters the company has seen revenue move around the low US$30 billions, from US$34.5 billion and EPS of US$1.18 in Q2 2025 to US$36.4 billion and EPS of US$0.55 in Q4 2025, before landing at US$34.3 billion and EPS of US$0.92 this quarter. This gives investors a straightforward read on top line scale and per share profitability. With trailing 12 month net margins running at 11.6% versus 13.3% last year, the story for this earnings season is how investors weigh slightly thinner profitability against the appeal of the current income stream and the growth outlook.

See our full analysis for Verizon Communications.

With the latest numbers on the table, the next step is to line them up against the main narratives around Verizon to see which storylines hold up and which get pushed back by the actual margin and earnings trends.

See what the community is saying about Verizon Communications

Margins Under Pressure At 11.6%

• Over the trailing 12 months, Verizon Communications booked about US$138.9b in revenue and US$16.2b in net income, which translates to an 11.6% net margin compared with 13.3% the prior year.
• Bulls point to broadband growth and cost programs as margin supports, but the current data gives them mixed backing:
  • The bullish narrative leans on margins holding around 14.4%. However, the trailing 12 month figure sits at 11.6%, which is lower than last year's 13.3% and below that bullish margin assumption.
  • At the same time, trailing revenue of US$138.9b is broadly consistent with prior 12 month totals in the US$135b to US$139b range. This suggests that margins rather than scale are doing most of the work in explaining why five year earnings are shown as declining at about 6.7% a year.

For investors who think earnings can recover as broadband and cost savings kick in, it is worth seeing how bullish forecasts stack up against the detailed margin history in the 🐂 Verizon Communications Bull Case.

EPS Trend Vs Forecast Rebound Story

• On a trailing 12 month basis, basic EPS is US$3.84 compared with US$4.70 at the high point in the last five quarters of data, while analysts are forecasting earnings growth of about 9.9% per year and revenue growth of about 2.0% per year.
• Bears argue that slower growth and a mature US wireless market limit how far EPS can climb, and the reported figures give them some support alongside a few challenges:
  • The five year record shows earnings declining about 6.7% per year, and the move from US$4.70 to US$3.84 in trailing EPS fits that picture of pressure rather than steady expansion.
  • However, analysts still pencil in earnings reaching about US$22.4b by 2029, up from roughly US$17.3b in the consensus narrative. This means the forecast rebound is quite different from the backward looking trend that bears focus on.

Skeptics who think the past EPS pattern tells the real story may want to compare these results with the detailed cautious view in the 🐻 Verizon Communications Bear Case.

Valuation, Dividend Yield And Debt Trade off

• With the stock at US$46.38, Verizon Communications trades on a trailing P/E of 11.9x, below the Global Telecom average of 17.1x but above the 9.4x peer average, alongside a 6.1% dividend yield and a DCF fair value of US$188.53.
• Consensus narrative highlights a balance of rewards and risks, and the numbers in this report frame that trade off quite clearly:
  • On the reward side, investors are looking at a sizeable 6.1% dividend yield plus a DCF fair value that sits far above the current price, as well as a consensus analyst price target of US$51.21 versus today’s US$46.38.
  • On the risk side, the same analysis flags a high debt load and recent insider selling, alongside net margins that have moved from 13.3% to 11.6%. As a result, the relatively low P/E and high yield come with balance sheet and profitability considerations attached.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Verizon Communications on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

If this mix of risks and rewards around Verizon Communications feels finely balanced, take the time while the details are fresh to consider the trade offs for yourself with the 3 key rewards and 2 important warning signs.

See What Else Is Out There Beyond Verizon Communications

Verizon Communications is facing pressure from thinner net margins around 11.6%, a lower trailing EPS of US$3.84 and a high debt load that tempers its income appeal.

If you are uneasy about that combination of earnings pressure and leverage, it makes sense to balance your watchlist with companies screened for stronger finances using the solid balance sheet and fundamentals stocks screener (49 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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