Will Verizon Communications Inc. (NYSE: VZ) Perform Better In 2018?

January 19, 2018, 11:54 am ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Verizon Communications Inc. (NYSE: VZ) shareholders had a year they would love to forget in 2017 given that the company’s shares declined for most of the year, but ended the year flat. Verizon’s poor performance can be largely attributed to the stiff competition from other wireless carriers such as T-Mobile US Inc (NASDAQ: TMUS), which descended into aggressive pricing wars that ate into the company’s revenues.

Article Summary

Verizon shareholders had a lackluster year in 2017.

The company is investing in new ventures to create new revenue streams.

The company’s different investments might payoff this year.

Here’s the trading report on VZ.

Verizon started last year on the wrong footing as it reported its first loss of postpaid subscribers in the first quarter given that it delayed in launching unlimited data plans, which were launched earlier by its main competitors AT&T Inc. (NYSE: T) and T-Mobile. However, the company quickly recovered in the second quarter by launching its own unlimited plans and reported strong growth in postpaid subscribers, which culminated in adding 603,000 new postpaid subscribers in Q3.

The stiff competition in the wireless industry has led Verizon to look elsewhere for new revenue streams, which is what led the company to merging it Yahoo! Sites with its AOL offerings in order to create a new company named Oath. The new company generated $2 billion in revenues for Verizon last year, but the company is facing stiff competition from AT&T, which owns DirecTV and is in the process of acquiring Time Warner Inc (NYSE: TWX).

The US wireless industry is getting more competitive with the entry of cable TV providers as multiple service operators who are also offering wireless services to US consumers. In order to stay ahead of its competitors, Verizon is planning to roll out its 5G network to several US cities this year, which will give it a major advantage against its competitors.

The company is investing heavily in boosting the quality of its wireless network, while at the same time spending heavily on promotions aimed at netting more subscribers. The wireless carrier recently announced a partnership with the NBA, which will allow its mobile subscribers to watch 8 NBA games, while getting discounts on a League pass for the rest of the season.

The NBA deal comes on the back of another deal with the NFL that allows the company’s subscribers to stream prime-time games, the Super Bowl and even playoffs. Verizon’s new ventures including investments in its wireless network are likely to fuel much stronger performance this year.

Finally, it is not enough to know that a stock is likely to head higher, or lower this year. As an investor or trader, it is important to time your entry and exit points accurately in order to minimize risk and maximize your profit potential.

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