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What’s behind Verizon’s Valuation

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Updated

Verizon’s scale

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Forward enterprise value-to-EBITDA ratios

On January 16, Verizon’s trailing-12-month EV[1.enterprise value]-to-EBITDA ratio was ~7.44x, while peers T-Mobile, Sprint, and AT&T had ratios of ~7.53x, ~4.67x, and ~7.47x, respectively. Verizon expects its EV-to-EBITDA ratio to be ~7.17x this year and ~7.14x in 2020.

Forward PE ratios

Verizon’s PE ratio is ~15.23x, lower than T-Mobile’s ~20.87x and AT&T’s ~15.24x. Verizon’s forward PE ratio is ~12.10x for fiscal 2019 and is estimated to be ~12.00x in fiscal 2020. In comparison, T-Mobile’s and AT&T’s forward PE ratios are ~16.55x and ~8.55x, respectively, for fiscal 2019.

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