Is Verizon Stock a Buy After This CRASH?
In a Nutshell
Verizon shares dropped 11.3% on speculation that SpaceX could acquire spectrum from Grain Management and become a mobile competitor, but the FCC won't rule until spring 2027 at the earliest, so the sell-off looks like an overreaction. At 10.7× earnings the stock is cheap versus tech peers, and the company still projects 6-7% EPS growth plus $6.4 billion in free-cash-flow for 2026. The recommended approach is to size any new position small, wait for price confirmation before adding, and treat the dip as a potential long-term entry rather than a panic exit.
These notes were generated by AI and may contain inaccuracies.
Verizon experienced its worst trading day since 2002, with shares dropping 11.3%. AT&T also fell 11.3%, while T-Mobile dropped 13.3%. These dividend-paying stocks that are considered stable investments experienced significant selling pressure due to news about SpaceX potentially acquiring frequency bands.
Elon Musk is looking to acquire frequency bands, which would be the final step needed to establish a major competitor in mobile services. The news has created market reaction, but the deal is still pending approval from the Federal Communications Commission (FCC). This pending status means the market reaction is based on speculation rather than confirmed regulatory approval.
The selling pressure represents market reaction to the potential threat of new competition from SpaceX. If the FCC does not approve the acquisition, this could represent a buying opportunity on the dip. However, if approved, a well-resourced competitor could become a major player in US mobile phone services.
Investors should discuss decisions with financial advisors and trusted individuals. The "all or nothing" mentality should be avoided. A measured approach of potentially buying a few shares for long-term investment, such as for children's accounts, represents a reasonable strategy rather than committing large sums.
Verizon is viewed as a bullish stock overall. The stock has historically reflected broader market movements, including significant declines during 2022's bear market and the 2020 pandemic sell-off. Similar patterns were observed in 2004-2005 when initial selling was followed by quick recovery.
While AI companies offer genuine value with high demand and billions in revenue generation, there may be over-promotion in some valuations. Diversification into oversold companies like Verizon could provide an alternative to concentrating solely in AI investments, though Verizon's movements still largely reflect broader market dynamics.
Investing Pro software, costing approximately $9 per month, provides fundamental analysis capabilities. The tool shows Verizon (VZ) has a potential upside of 16.2% based on fair value estimates, with a price-to-earnings ratio of 10.7 times earnings.
Verizon's P/E ratio of 10.7x is significantly lower than other major companies. Meta trades at 26.9x earnings, Apple at 38x, while Tesla trades at 397x earnings. Tesla has a market capitalization of $1.5 trillion while generating only $3.8 billion in annual profits, representing a substantial premium for growth expectations.
Verizon's low P/E ratio indicates it is not trading at a large premium. Revenue showed slight decline in the most recent quarter. The company carries a heavy debt burden. Free cash flow is projected at $6.4 billion for full-year 2026, with EBITDA margin reaching a record 40%.
Rather than focusing solely on positive aspects, risk awareness is emphasized for novice investors. In downside scenarios, Q2 2026 revenue of $34.3 billion came in 2.8% below expectations. Thirteen out of 23 analysts revised earnings per share estimates downward.
The EA Connect project and BT International Communications joint venture are expected to complete in the second half of 2027, representing long-term catalysts. Verizon's full-year 2026 forecast includes quarterly earnings per share growth of 6-7% and free cash flow of $6.4 billion.
The frequency spectrum in question is not owned by Verizon but came from Grain Management, which purchased it from T-Mobile. SpaceX submitted its application on October 8, with no official FCC timeline yet established. The unofficial target is approximately 180 days from public notice, making spring 2027 a realistic timeframe.
A 10x earnings multiple for telecom companies is cheap for structural reasons. Over the next 10-15 years, satellite phone technology may eat into rural revenues, cable and fixed wireless networks are expanding into home broadband, and significant capital expenditures are required to remain competitive on 5G networks. Dividends provide a safety net but are not guaranteed.
AT&T, Verizon, and T-Mobile are all likely to oppose the SpaceX acquisition during the review period. The next real catalyst will be news from FCC operations, which could affect the stocks in either direction.
AT&T declined 9.8% and is trading at $22 per share, appearing technically oversold. T-Mobile showed a more significant decline of 13.2% with fewer highs and lows in its price action. Verizon is preferred among the three major carriers.
The market may have overreacted to the headline news, as the FCC approval or rejection process is not expected until around spring 2027. The stock was already declining before this news emerged, suggesting the announcement may have accelerated an existing trend rather than created a new one.
A small allocation approach is recommended, perhaps buying a few thousand dollars for long-term holding in children's investment accounts. If the price begins to recover, additional positions can be considered. The current drop may represent an opportunity if the decline has been overdone.
Before investing, investors should define their plan including target selling price and response to potential new lows. The probability of winning should be much greater than the probability of losing. Position sizing should reflect the level of risk, with smaller positions for higher-risk or early entries.
The size of the position determines the level of risk. If a position causes significant stress, the position size is likely too large. One share dropping 10% causes minimal concern due to the small dollar amount at risk. Proper position sizing allows participation in riskier deals while respecting capital allocation.
Rather than hoping for recovery and entering positions prematurely, waiting for confirmation of price movement in the desired direction provides greater comfort. The LPP team emphasizes this approach daily during live sessions, focusing on simple but effective risk management principles.
LPP 3.0 offers one-time payment for lifetime access with daily live trading sessions lasting 30 minutes to one hour when markets are open. The October sale provides $225 savings, equating to approximately $1.30 per day. All sessions are archived for later viewing, and the program includes a lesson library covering account setup and market fundamentals.
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