Why is Verizon Communications Inc. stock underperforming the market?

Verizon Communications Inc. reported strong fourth-quarter earnings, with total revenue reaching $35.70 billion, surpassing the consensus estimate of $35.32 billion and marking a 1.6% year-over-year growth. The company added approximately 1 million postpaid mobile and broadband subscribers, achieving its best quarterly result in over a decade. Net income improved significantly to $5.1 billion from a loss of $2.6 billion a year ago. However, the consumer segment's EBITDA margin declined by 100 basis points to 37.5%, while the business segment's EBITDA margin improved by 100 basis points to 22.1%. Total wireless service revenue increased by 3.1% year-over-year to $20.0 billion. Verizon experienced mixed performance across its segments, with Verizon Business revenues decreasing by 1.5% year-over-year to $7.5 billion, while Verizon Consumer revenue rose by 2.2% to $27.6 billion. Analysts have maintained neutral ratings on Verizon, with minor adjustments in price targets. Looking ahead, Verizon's outlook for 2025 includes an expected growth in wireless service revenue of 2.0% to 2.8%. The company reported a free cash flow of $19.8 billion for 2024, up from $18.7 billion year-over-year. Despite challenges in revenue growth and debt management, Verizon remains profitable and financially healthy.