The Achilles heel of Verizon (VZ) stock is a risk in revenue growth, mainly from Oath — its internet media business — which reported a 6.9% revenue decline in October. Also, the telco giant gave a somewhat subdued outlook for Oath’s future advertising revenues. Many analysts would like to see Verizon divest Oath and concentrate on its core business.
Furthermore, on the 5G front where Verizon is aiming to be the leader, VZ’s organic earnings growth will not possibly materialize until 2020 — after the full mobile 5G launch in 2019. Verizon’s most recent financial results benefited from cost savings measures as well as lower taxes — two factors that have already been baked into the current VZ stock price.