Telecom stocks have been under pressure this year as investors worry that SpaceX plans to turn its Starlink business into a major mobile carrier. Verizon CEO Dan Schulman said on the earnings call that SpaceX would need to build a significant terrestrial network, which would take several years and cost hundreds of billions of dollars, and that Verizon will compete aggressively if Starlink pursues mobile market share. Verizon reported strong third-quarter results, with postpaid phone net additions at their best in five years and quarterly net account growth at its highest in more than a decade. The author argues the market is overreacting to the SpaceX risk, citing a valuation of about eight times estimated future profits and a dividend yield of 6.3%.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
telecommunicationsSpaceXVerizondividends
Open a keyword to see other news on the same topic.
Related news
- Is High-Yield Verizon a Stock a Buy Despite SpaceX Worries?
Verizon's third-quarter results showed 406,000 net postpaid phone additions, up 820% year over year and its best Q3 in five years, plus 137,000 net account additions. Revenue rose 1.5% to $34.3 billion and adjusted EPS climbed 8.3% to $1.31, while the company raised its 2026 postpaid phone additions outlook to 1.1 million to 1.2 million and its adjusted EPS growth outlook to 7% to 7.5%. The stock has fallen on concerns that SpaceX could enter the U.S. mobile market, and CEO Dan Schulman said building a terrestrial network would require 65,000 to 80,000 macro sites, cost $300 billion to $500 billion and take four to six years. The author views the stock as cheap, citing a dividend yield above 6.5%, a 11% free cash flow yield and an 8-times forward P/E.
- Verizon's 6% Yield Is Worth Holding for Years
Verizon shares (VZ) fell nearly 9% on October 9, their worst day since 2002, after SpaceX acquired nationwide spectrum, raising the prospect of a Starlink mobile service. However, the latest quarterly report showed a healthy business: free cash flow rose 12% to $7.8 billion in the third quarter, and management raised its full-year growth forecast to nearly 12%. Verizon pays $0.7075 per share quarterly, about $2.83 per year, yielding roughly 6.5% at about $43.50 per share on October 26; it has raised its payout for 20 consecutive years, and dividends accounted for about 58% of free cash flow over the past year. Verizon also added a net 406,000 monthly phone plan customers, up 820% from a year earlier, and fewer customers are leaving each month. The article argues that SpaceX may win a share of the business but cannot control the whole market, which is already highly competitive given the large retail presence of AT&T and Verizon, and concludes Verizon still looks like a solid long-term income investment.
- Verizon's Turnaround Is Gaining Momentum. Is This 6.5%-Yielding Dividend Stock a Buy?
Verizon added 406,000 postpaid phone customers in the third quarter, up 820% year over year, and third-quarter earnings rose 8.3% to $1.31 per share. Free cash flow reached $18 billion over the first nine months, up 14.3%, covering $8.8 billion in dividends and $4 billion in buybacks so far this year. The company raised its full-year outlook for the third straight quarter, now expecting adjusted EPS growth of 7%-7.5% and free cash flow growth approaching 12%. Verizon also signed an AI infrastructure deal with Amazon Web Services valued at over $2 billion, after an earlier deal worth more than $1 billion with Google. The stock trades around $43, about 8.5 times earnings, and the author views it as attractive after earnings, with total returns of roughly 10% annualized if growth holds.
- Grading Dan Schulman’s First Year at Verizon: Customers, Cash and the Starlink Question
In the third quarter, Verizon added a net 406,000 postpaid phones, up 820% year over year, and 137,000 net accounts; consumer postpaid phone churn was 87 basis points, while promotional acquisition costs fell 41%. Adjusted EPS reached $1.31, up 8%, and free cash flow hit $7.8 billion, the highest since 2020; the company raised its adjusted EPS growth guidance to 7% to 7.5%. Revenue rose 1.5% to $34.3 billion while equipment revenue fell 9%, and debt totals $166.2 billion. On the Starlink threat from SpaceX, Schulman argued that in markets generating about 98% of its revenue, Verizon is 100% to a thousand times more efficient than rivals, while some commentators say the satellite threat is overblown.
- Is Elon Musk Coming for Verizon?
A Motley Fool Hidden Gems podcast discusses SpaceX's wireless ambitions after a reported spectrum acquisition sent Verizon stock down about 10%. One host says his current service was about eight times faster than SpaceX's $55 offering, and doubts many users would accept the slower speeds and higher latency of satellite connections. The guests note the spectrum suits terrestrial networks better than satellites, that building one could cost 10 billion or more, and that mobile carriers are valued at less than two times sales. With roughly 11,000 satellites in orbit and an estimated 40,000 users per newer satellite, Starlink could theoretically serve hundreds of millions, but speed and capital expenditure remain open questions.
- Does SpaceX’s $8 Billion Spectrum Deal Mean Verizon’s Q3 Earnings Don’t Really Matter?
Verizon reports third-quarter results on October 26, days after SpaceX announced a roughly $8 billion deal for nationwide 800 MHz spectrum, which the author says makes the report more important. Last quarter, Verizon beat with adjusted EPS of $1.30 against a $1.27 consensus, while revenue fell 0.7% to $34.25 billion as equipment revenue dropped nearly 20% on a deliberate pullback on subsidies. The core business improved, with 184,000 postpaid phone net adds, churn at 0.92%, and a record 40.1% adjusted EBITDA margin, and full-year adjusted EPS guidance was raised to $4.99 to $5.04. The author will watch whether service revenue growth nears 3% in Q3 and about 4% in Q4, and whether consumer postpaid phone churn of 84 basis points holds as SpaceX's service is expected to start in early 2028 after the deal closes in the first half of 2027.
Related markets
Latest news
- Why Bristol Gate Canadian Equity Strategy Bought OR Royalties Inc. (OR) After Gold's Pullback
Bristol Gate Capital Partners' Q3 2026 investor letter for its Canadian Equity Strategy said the strategy underperformed the S&P/TSX Composite Total Return Index, which gained 1.6% in the quarter, as market returns concentrated in a few large stocks and rising bond yields weighed on defensive and rate-sensitive sectors. The strategy reallocated capital into OR Royalties (NYSE:OR), a precious-metals royalty company, after gold fell more than 25% from its January peak. The letter cited the company's cash margin of about 97% and minimal debt. As of October 30, 2026, OR shares closed near $31.89, with a market cap of about $5.88 billion, after a one-month return of about -7.13%. Hedge fund holders numbered 29 at the end of Q2, down from 35 in the prior quarter.
- Tom Lee Calls Bottom on AI Stock Selloff, Citing Tight Supply and Crypto Resilience
Fundstrat co-founder Tom Lee told CNBC the AI stock selloff has reached its bottom, arguing demand remains constrained by supply. He pointed to crypto's limited reaction to the Binance hack, initially estimated at about $6.3 billion, as a sign that many sellers have already exited. Despite strong AI demand, Intel shares plunged nearly 30% to $65.76 after a weak fourth-quarter forecast, due to manufacturing constraints and a weaker PC business. Bitcoin fell about 4% to roughly $76,400, and U.S. spot Bitcoin ETFs saw $643.2 million in outflows that day. Binance said about $3 billion of the affected assets had been frozen.
- Why Marvell Technology Plunged Today
Marvell Technology (MRVL) shares fell 10% by 12:54 p.m. EDT after the company agreed to buy optical laser maker Lumentum (LITE) in an all-stock deal valuing it at roughly $115 billion, a 24% premium. Investors worried Marvell may be paying a steep price, since Lumentum's stock had already risen sharply over two years and the purchase price was more than five times its share price a year earlier. The article says Marvell is drawn to Lumentum's indium phosphide laser technology, which could be combined with Marvell's digital signal processors and connectivity for next-generation AI systems as co-packaged optics spread inside server racks. It also notes AI stocks are volatile and have recovered from past selloffs, while investors fear the upcoming midterm elections.
- ServiceNow vs. UiPath: Consistent Revenue Growth vs. Volatile Seasonal Trends
The article compares quarterly revenue for ServiceNow (NOW) and UiPath (PATH) over the last eight quarters, with data as of November 1, 2026. ServiceNow shows consistent quarter-over-quarter sales growth, and its current remaining performance obligations (contract revenue to be recognized within the next 12 months) reached $13.7 billion, up 20.5% year over year. UiPath follows a more typical year-over-year growth pattern, with fiscal Q2 revenue of $410.3 million, up 13% from a year earlier, versus 17% in Q1 and 14% in Q4. It forecasts fiscal Q3 revenue of $440 million to $445 million. Its revenue often spikes near calendar year-end as businesses spend remaining IT budgets, adding to quarterly volatility.
- Bond Market Signals Distress About CoreWeave. Here's How To Profit From It.
As investors debate whether an AI bubble is about to burst, a few weak firms have been hit hard. CoreWeave's stock is one of them.
- This Will be John Ternus's First Earnings Call as CEO
John Ternus, described as the 'product guy,' will host his first earnings call as Apple CEO tonight, and all eyes will be on him.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.