Verizon commands a 38% share of the U.S. wireless market, positioning it as a dominant player. With a 6.4% yield, its financials are robust, but equipment sales losses highlight challenges ahead. Despite stock performance closely mirroring the S&P 500, long-term profitability may suffer; profit hinge on subscriber retention rather than device sales, particularly as revenue for iPhones doesn't significantly enhance overall profit margins.
While Verizon's stock has increased by 19% in the past year, equating to the S&P's broader 26% growth, its primary revenue stream remains from subscription services. Equipment revenue is not enough to offset high costs incurred in selling smartphones, leading to a concerning trend in equipment sales losses which underscored the importance of subscriber metrics for the company.
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