Verizon Communications Inc. VZ has officially completed the transaction related to its 6,300 wireless communication towers to Vertical Bridge REIT, LLC, one of the largest privately owned communications infrastructure operators in the United States. The deal, valued at around $3.3 billion (inclusive of certain commercial benefits) gives exclusive rights to Vertical Bridge to lease, operate and manage these assets across all 50 states. This milestone reinforces Vertical Bridge's position as a leader in the U.S. communications infrastructure market.
Vertical Bridge defined the deal as a "transformative milestone," emphasizing the opportunity these under-utilized towers, often in challenging locations, provide to enhance services and build stronger customer relationships. This deal indicates a growing trend of telecom companies monetizing tower assets to focus on core operations like 5G network expansion.
On Sept. 30, 2024, Verizon and Vertical Bridge announced an agreement granting the latter exclusive rights to manage 6,339 towers across the 50 states and Washington, D.C. The deal was structured as a prepaid lease with upfront proceeds of $2.8 billion. As part of the deal, there will be a 10-year leaseback agreement allowing Verizon to retain capacity on the towers as the anchor tenant, with options to extend for up to 50 years.
The agreement builds on Verizon’s efforts to reduce tower-related costs and diversify vendor relationships. Vertical Bridge highlighted the transaction positions it to meet increasing demands for wireless infrastructure, driven by artificial intelligence (AI) and 5G.
Verizon Communications Inc. Price and Consensus
Verizon Communications Inc. price-consensus-chart | Verizon Communications Inc. Quote
Verizon offers communication services in the form of local phone service, long-distance, wireless and data services.
With the ramp-up of 5G service across the country, Verizon is likely to retain its lead in promulgating 5G mobile networks nationwide by using virtualized machines, advanced levels of operational automation and adaptability. Its 5G mobility service offers a premium experience across various industries such as public safety, health care, retail and more.
Verizon’s mmWave footprint delivers game-changing experiences for the densest parts of the network and offers highly-predictable signal waves leading to greater efficiency and less interference for customers. The company’s focus on online content delivery, mobile video and online advertising is expected to drive growth.
However, stiff competition from other major players and saturation in the U.S. wireless market are hurting its profits. Heavy spending on promotional activities to attract customers is straining margins. A challenging macroeconomic environment and lower postpaid phone upgrades are major concerns.
VZ’s Zacks Rank & Stock Price Performance
Verizon currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 6.5% in the past year compared with the industry’s growth of 27.8%.
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Stocks to Consider
Some better-ranked stocks from the broader technology space are InterDigital, Inc. IDCC, Ubiquiti Inc. UI and QUALCOMM Incorporated QCOM. IDCC and UI presently sport a Zacks Rank #1 (Strong Buy) each, whereas QCOM carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for InterDigital’s 2024 earnings per share (EPS) is pegged at $15.22, unchanged in the past seven days. IDCC earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 163.7%. The company’s long-term earnings growth rate is 15%. Its shares have jumped 64.4% in the past six months.
The Zacks Consensus Estimate for Ubiquiti’s fiscal 2025 EPS is pegged at $7.30. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its shares have increased 18.9% in the past year.
The Zacks Consensus Estimate for QCOM fiscal 2025 EPS is pegged at $11.14, unchanged in the past seven days. QUALCOMM Incorporated earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.57%. Its shares have increased 10.3% in the past year.
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QUALCOMM Incorporated (QCOM) : Free Stock Analysis Report
Verizon Communications Inc. (VZ) : Free Stock Analysis Report
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
Ubiquiti Inc. (UI) : Free Stock Analysis Report
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