Verizon Launches New 5G Wireless Service

Verizon (Ticker Symbol: VZ) announced on Wednesday that it is releasing its new 5G wireless network.  The new 5G services will first be released in Chicago and Minneapolis with plans to install the services in 30 additional metropolitan areas this year.  Verizon’s Chief Executive Officer Hans Vestberg stated that “Verizon is unlikely to see any impact on revenue from people who upgrade to new 5G phones until around 2021.”   

The move by Verizon will enable its customers who are equipped with 5G phones to have access to the service.  The new service will have speeds of up to 1 Gps, which is 10 times faster than the speed of 4G. Currently, there is only one phone on the market that can support the 5G wireless service and that is the Motorola Z3.  Samsung is releasing a 5G compatible phone, the Galaxy S10 5G model, later this year.

Verizon also released news that it is going to have a new mobile data plan that is directly designed for kids.  The new “Just Kids Plan” has unlimited talk/text for up to 20 parent-approved contacts, along with 5GB of monthly data.  This will also allow parents to put content filters in place, track the location of their kids, and even set screen time limits.  The plan will also have a safety mode where kids can continue to use data at reduced speeds without getting charged after they hit their 5GB limit.  

Verizon had a rough start to 2018, spending the first two quarters of the year in negative territory. The stock found some support just under the $47.00 price level while forming a rounded bottom basing pattern.  In July of 2018, Verizon’s stock went on a tear, breaking above its downtrend from its yearly highs and crossing above the 100 and 200-day Moving Averages. The stock continued to rally gaining 33%, propelled by two strong earnings and revenue beats in the third and fourth quarters.  In December of 2018, Verizon’s Stock had a slight setback, pulling back over 50% to close out the year.

In 2019, Verizon started out the year negative, finding some support at the 200-day Moving Average.  After another positive report, Verizon bounced higher breaking above its downtrend and trading again above both the 100 and 200-day Moving Averages.  

(Chart above courtesy of ​www.tipranks.com​)  

Based on a survey of 18 analysts offering 12-month price targets, the average price target for Verizon’s stock is $61.57.  According to that number, the stock is priced at a discount relative to Wall Street’s analysts and could be considered undervalued around current levels near $58.86.

Verizon’s users will be the first in the world to have the power of 5G in the palm of their hands.  The number of people who can actually take advantage of that service will be limited, at first, but Verizon has plans for quick expansion.  Investors should look to Verizon’s earnings and conference call on April 23rd for more news and updates on the new 5G LTE service.

 

 


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