Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
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Current Valuation Ratios
Verizon Communications Inc., current price multiples
| Verizon Communications Inc. | AT&T Inc. | T-Mobile US Inc. | Telecommunication Services | Communication Services | ||||
|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||
| Current share price (P) | ||||||||
| No. shares of common stock outstanding | ||||||||
| Growth rate (g) | ||||||||
| Earnings per share (EPS) | ||||||||
| Next year expected EPS | ||||||||
| Operating profit per share | ||||||||
| Sales per share | ||||||||
| Book value per share (BVPS) | ||||||||
| Valuation Ratios (Price Multiples) | ||||||||
| Price to earnings (P/E) | ||||||||
| Price to next year expected earnings | ||||||||
| Price-earnings-growth (PEG) | ||||||||
| Price to operating profit (P/OP) | ||||||||
| Price to sales (P/S) | ||||||||
| Price to book value (P/BV) | ||||||||
Based on: 10-K (reporting date: 2024-12-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Verizon Communications Inc., historical price multiples
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The financial ratios over the five-year period indicate several noteworthy trends in valuation and profitability metrics.
- Price to Earnings (P/E) Ratio
- The P/E ratio shows a fluctuating pattern, decreasing from 13.13 in 2020 to a low of 7.91 in 2022, which may suggest either an increase in earnings or a decline in stock price during this period. However, it then rises sharply to 14.38 in 2023 before declining again to 9.75 in 2024. This volatility implies changing investor sentiment or variations in earnings relative to stock price.
- Price to Operating Profit (P/OP) Ratio
- A similar downward trend is observed here with the ratio moving from 8.12 in 2020 to 5.52 in 2022, indicating improved operating profitability or decreasing stock prices relative to operating profit. There is a partial recovery to 7.3 in 2023 followed by a decline to 5.95 in 2024, suggesting fluctuating market perceptions of operational efficiency or profit sustainability.
- Price to Sales (P/S) Ratio
- The P/S ratio consistently declines from 1.82 in 2020 to 1.23 in 2022, reflecting a potential reduction in sales valuation or stock price adjustment. Afterwards, it slightly increases to 1.25 and 1.27 in the subsequent years, indicating some stabilization in valuation relative to sales, though it remains below earlier levels.
- Price to Book Value (P/BV) Ratio
- This ratio exhibits a steady decrease from 3.45 in 2020 to 1.72 in 2024, which could suggest either a growing book value or a decreasing market price in relation to the company's net asset value. The decline is consistent over the entire period, indicating a longer-term market revaluation of net assets.
Overall, the data reveals a period of declining valuations across multiple price-based ratios until 2022, followed by some degree of recovery and continued fluctuations in subsequent years. The persistent decrease in P/BV ratio points to a sustained reassessment of the company's net worth compared to market valuation. These patterns collectively suggest shifting investor outlooks and possibly evolving company fundamentals over time.
Price to Earnings (P/E)
Verizon Communications Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to Verizon (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| P/E Ratio, Sector | ||||||
| Telecommunication Services | ||||||
| P/E Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net income attributable to Verizon ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Verizon Communications Inc. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends over the five-year period from 2020 to 2024.
- Share Price
- The share price exhibited a declining trend from 56.5 US$ in 2020 to 40.01 US$ in 2022, followed by relative stabilization around the 39.72 to 40.53 US$ range in 2023 and 2024. This indicates a substantial decrease in market valuation during the initial years, with a plateauing effect in the later years.
- Earnings per Share (EPS)
- The EPS increased from 4.3 US$ in 2020 to 5.26 US$ in 2021, showing an improvement in profitability. However, it slightly declined to 5.06 US$ in 2022 and dropped more significantly to 2.76 US$ in 2023, before recovering to 4.16 US$ in 2024. This variability suggests challenges in maintaining consistent earnings growth, with a notable dip followed by partial recovery.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio decreased from 13.13 in 2020 to 7.91 in 2022, indicating that the stock became less valued relative to its earnings, potentially due to the falling share price and fluctuating earnings. In 2023, the ratio surged to 14.38, reflecting either an increase in share price relative to earnings or diminished earnings, followed by a decline to 9.75 in 2024. This variability points to fluctuating market sentiment and changing valuation dynamics.
Overall, the data depicts a challenging period marked by a significant reduction in share price and fluctuating earnings performance. While the share price showed some stability in the later years, earnings experienced volatility that impacted the valuation multiples. The patterns suggest periods of investor caution and variable profitability, warranting continued monitoring of financial and market conditions.
Price to Operating Profit (P/OP)
Verizon Communications Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| P/OP Ratio, Sector | ||||||
| Telecommunication Services | ||||||
| P/OP Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Verizon Communications Inc. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the provided financial data reveals several notable trends over the five-year period from 2020 to 2024.
- Share Price
- The share price demonstrates a declining trend overall from 56.5 US$ at the end of 2020 to 40.53 US$ at the end of 2024. The most significant reduction occurred between 2021 and 2022, dropping from 53.32 US$ to 40.01 US$. The price stabilizes somewhat from 2022 onwards, with marginal variations, ending slightly higher in 2024 compared to 2023.
- Operating Profit Per Share
- Operating profit per share initially increased from 6.96 US$ in 2020 to 7.73 US$ in 2021, indicating improved profitability. However, this was followed by a decline to 7.25 US$ in 2022 and a sharper dip to 5.44 US$ in 2023. A recovery is observed in 2024 with operating profit per share rising back to 6.81 US$. Overall, the operating profit shows volatility with a peak in 2021 and a trough in 2023.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio exhibits some fluctuations over the years. It starts at 8.12 in 2020, decreases to its lowest point of 5.52 in 2022, then increases to 7.3 in 2023 before declining again to 5.95 in 2024. These dynamics suggest changes in market valuation relative to operating profit, reflecting varying investor sentiment or changes in the company's earnings outlook.
In summary, the share price has declined significantly over the reported period, despite fluctuations in operating profit per share, which peaked around 2021 before declining and partially recovering in 2024. The P/OP ratio movements suggest fluctuating market appraisal of earnings performance. The diverging trends between share price and operating profit per share, especially the significant share price decline offset by only moderate changes in operating profit, could imply external factors influencing market valuation beyond operating profitability alone.
Price to Sales (P/S)
Verizon Communications Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating revenues (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| P/S Ratio, Sector | ||||||
| Telecommunication Services | ||||||
| P/S Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Operating revenues ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Verizon Communications Inc. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a downward trend from 56.5 US$ at the end of 2020 to 40.01 US$ at the end of 2022. This decline continued slightly into 2023 and 2024, with values stabilizing around 39.72 and 40.53 US$ respectively, indicating a significant decrease over the five-year period with some signs of price stabilization in the most recent years.
- Sales per Share Trend
- Sales per share exhibited moderate fluctuations over the observed period. Starting at 31 US$ in 2020, there was a gradual increase reaching 32.58 US$ by the end of 2022. However, this figure declined slightly in 2023 to 31.87 US$, followed by a minor recovery to 32.02 US$ in 2024. Overall, sales per share have remained relatively stable with only minor variations.
- Price-to-Sales (P/S) Ratio Analysis
- The P/S ratio showed a consistent decline from 1.82 in 2020 to 1.23 in 2022, reflecting a decrease in the market valuation relative to sales. This downward trend was slightly reversed in 2023 and 2024, with the ratio increasing marginally to 1.25 and 1.27 respectively. This suggests that while the market's valuation of sales dropped initially, there was a slight rebound in investor confidence or market valuation relative to sales in the later years.
- Overall Observations
- The declining share price coupled with a relatively stable sales per share indicates that market sentiment or external factors may have exerted downward pressure on the stock's valuation. The lower P/S ratio over time also signals a reduced valuation multiple, although the modest recovery in the last two years implies potential stabilization or cautious optimism from the market. These trends suggest that while operational performance remained steady, market perceptions had a notable impact on valuation throughout the period under review.
Price to Book Value (P/BV)
Verizon Communications Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Equity attributable to Verizon (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| AT&T Inc. | ||||||
| T-Mobile US Inc. | ||||||
| P/BV Ratio, Sector | ||||||
| Telecommunication Services | ||||||
| P/BV Ratio, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Equity attributable to Verizon ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Verizon Communications Inc. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a downward trend over the observed period. Starting at $56.50 at the end of 2020, it decreased steadily each year, reaching a low of $39.72 by the end of 2023. A slight recovery is noted in 2024, with the price rising marginally to $40.53. Despite this minor rebound, the price remains significantly below its 2020 level.
- Book Value per Share (BVPS) Trend
- The book value per share showed consistent growth throughout the period. Beginning at $16.39 in 2020, the BVPS increased each year, reaching $23.57 by the end of 2024. This steady upward movement suggests ongoing accumulation of equity value per share.
- Price-to-Book Value (P/BV) Ratio Trend
- The price-to-book value ratio exhibited a clear downward trajectory, decreasing from 3.45 in 2020 to 1.72 in 2024. This decline is primarily driven by the sharper decrease in share price relative to the steady increase in book value per share. The ratio approaching closer to 1 indicates the market valuation is getting nearer to the company's book value.
- Overall Insights
- The simultaneous increase in book value per share combined with a declining share price suggests that the market may be valuing the company at a discount relative to its net asset value. The decreasing P/BV ratio supports this observation. The slight uptick in share price in 2024 might indicate some market stabilization or perceived improvement in outlook, although it remains below earlier valuations. This divergence between book value growth and share price decline could warrant further investigation into market sentiment, profitability, or external economic factors influencing investor confidence.