What Does Verizon’s Current Valuation Indicate?

As of July 31, 2017, Verizon’s (VZ) market capitalization was ~$197.4 billion, making it the second-largest US telecom giant in terms of market capitalization. In comparison, rival AT&T (T) had a market capitalization of ~$239.8 billion. T-Mobile’s (TMUS) market capitalization was ~$51.2 billion, and Sprint’s (S) market capitalization was ~$31.9 billion.

In the July 31 trading session, Verizon stock closed at $48.40 near its upper Bollinger Band level of $47.64, which indicates that Verizon’s stock is overbought.

Verizon’s short interest as a percentage of its shares outstanding (or short interest ratio) on July 31, 2017, was ~2.3%. Usually, when a stock’s short interest ratio is higher than 40%, it means that the traders and investors expect a correction in the stock’s price.

As of July 31, 2017, Verizon has an EV-to-EBITDA (enterprise value to earnings before interest, taxes, depreciation, and amortization) multiple of 6.83x. In comparison, rivals AT&T, T-Mobile, and Sprint have EV-to-EBITDA multiples of 6.70x, 6.97x, and 5.62x, respectively.

As of July 31, 2017, Verizon is trading at a PE (price-to-earnings) multiple of 12.67x, whereas T-Mobile, AT&T, and Sprint have PE multiples of 23.12x, 13.09x, and 101.40x, respectively.