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AT&T (T)
NYSE:T
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AT&T
(NYSE:T)
76Outperform
Positive Factors
Financial Performance
AT&T remains a favorite stock, supported by solid multiyear EBITDA growth of 3%+, 9% CAGR in FCF/share and EPS through 2027, and accelerating capital returns with potential upside from tax reform.
Market Expansion
LUMN's mass market segment covers 16 states with virtually no overlap with AT&T, offering a complementary footprint for expansion.
Strategic Acquisitions
AT&T is in talks to acquire Lumen's consumer fiber operations for $5.5bn, suggesting strategic growth and expansion opportunities.
Negative Factors
Operational Challenges
Internet Air disconnects in New York could pressure postpaid voice retention given the overlap with Mobility subscribers.
Revenue Challenges
Slightly lower postpaid phone ARPU and softer postpaid voice adds of 260k following CEO Stankey’s warning of higher churn in January.
AT&T (T) vs. S&P 500 (SPY)
Market Cap
$205.30B
Dividend Yield3.88%
Average Volume (3M)47.12M
Price to Earnings (P/E)19.2
Beta (1Y)0.25
Revenue Growth-0.08%
EPS Growth-24.48%
CountryUS
Employees140,990
SectorCommunication Services
Sector Strength59
IndustryTelecommunications Services
Share Statistics
EPS (TTM)1.49
Shares Outstanding7,178,183,000
10 Day Avg. Volume46,575,793
30 Day Avg. Volume47,116,499
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.59
Price to Cash Flow (P/CF)4.10
P/FCF Ratio3.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$28.19Price Target Upside5.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering23
AT&T Business Overview & Revenue Model
Company DescriptionAT&T Inc. provides telecommunications, media, and technology services worldwide. Its Communications segment offers wireless voice and data communications services; and sells handsets, wireless data cards, wireless computing devices, and carrying cases and hands-free devices through its own company-owned stores, agents, and third-party retail stores. It also provides data, voice, security, cloud solutions, outsourcing, and managed and professional services, as well as customer premises equipment for multinational corporations, small and mid-sized businesses, governmental, and wholesale customers. In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers. It markets its communications services and products under the AT&T, Cricket, AT&T PREPAID, and AT&T Fiber brand names. The company's Latin America segment provides wireless services in Mexico; and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brand names. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in 2005. AT&T Inc. was incorporated in 1983 and is headquartered in Dallas, Texas.
How the Company Makes MoneyAT&T makes money primarily through its wireless communications services, which include voice, data, and text services to individual consumers and businesses. This segment generates significant revenue from monthly subscription plans, device sales, and prepaid services. Additionally, AT&T earns revenue from its broadband services, offering high-speed internet to residential and business customers. The company also derives income from its entertainment segment, which includes video services through platforms like DIRECTV. Key revenue streams include service fees, equipment sales, and advertising. Partnerships with device manufacturers and content providers enhance its offerings and contribute to its earnings.
AT&T Financial Statement Overview
Summary
AT&T demonstrates financial stability with strong gross margins and cash flow generation, although profitability metrics have faced pressure. The high leverage poses a risk but is partially mitigated by the company's consistent operating cash flow.Income Statement
AT&T's gross profit margin is strong, indicating effective cost management, with a gross profit of $95.36 billion on $122.34 billion of revenue for 2024. However, the net profit margin has decreased compared to the prior year, reflecting tighter profit constraints. Revenue growth has been stagnant, with a slight decline from 2023 to 2024. EBIT and EBITDA margins are healthy but show room for improvement to enhance overall profitability.70
Positive
Balance Sheet
The debt-to-equity ratio remains high, indicating AT&T's reliance on debt financing, with a total debt of $140.92 billion against $118.25 billion in equity. Return on equity has decreased, aligning with reduced net income, thus affecting shareholder returns. The equity ratio is stable at approximately 29.94%, suggesting a balanced asset-financing strategy, but further strengthening of equity could reduce financial risk.65
Positive
Cash Flow
Operating cash flow is robust, with a slightly increasing trend, reaching $38.77 billion in 2024. The reduction in free cash flow is a concern, though it remains positive at $18.51 billion, ensuring operational flexibility. The ratio of operating cash flow to net income is strong, indicating efficient conversion of income into cash.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 122.34B | 122.43B | 120.74B | 134.04B | 171.76B | Gross Profit |
| 95.36B | 72.31B | 69.89B | 73.63B | 91.84B | EBIT |
| 19.05B | 23.46B | -4.59B | 25.90B | 6.41B | EBITDA |
| 44.04B | 45.32B | 21.07B | 53.72B | 33.57B | Net Income Common Stockholders |
| 10.95B | 14.40B | -8.52B | 20.08B | -5.18B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.30B | 6.72B | 3.70B | 19.22B | 9.74B | Total Assets |
| 394.80B | 407.06B | 402.85B | 551.62B | 525.76B | Total Debt |
| 140.92B | 154.90B | 154.68B | 195.83B | 179.45B | Net Debt |
| 137.63B | 148.18B | 150.98B | 176.61B | 169.71B | Total Liabilities |
| 274.57B | 287.64B | 296.40B | 367.77B | 346.52B | Stockholders Equity |
| 118.25B | 103.30B | 97.50B | 166.33B | 161.67B |
| Cash Flow | Free Cash Flow | |||
| 18.51B | 20.46B | 12.40B | 25.43B | 27.45B | Operating Cash Flow |
| 38.77B | 38.31B | 32.02B | 41.96B | 43.13B | Investing Cash Flow |
| -18.07B | -19.66B | -25.80B | -32.09B | -13.55B | Financing Cash Flow |
| -24.71B | -15.61B | -23.74B | 1.58B | -32.01B |
AT&T Technical Analysis
Neutral
26.64
Price Trends
26.19
Positive
24.36
Positive
22.11
Positive
Market Momentum
0.65
Negative
71.04
Negative
88.04
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For T, the sentiment is Neutral. The current price of 26.64 is below the 20-day moving average (MA) of 27.21, above the 50-day MA of 26.19, and above the 200-day MA of 22.11, indicating a neutral trend. The MACD of 0.65 indicates Negative momentum. The RSI at 71.04 is Negative, neither overbought nor oversold. The STOCH value of 88.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for T.
AT&T Risk Analysis
AT&T disclosed 22 risk factors in its most recent earnings report. AT&T reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
AT&T Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $305.86B | 27.72 | 17.93% | 1.14% | 3.62% | 38.24% | |
77 Outperform | $135.06B | 8.62 | 19.24% | 3.47% | 1.78% | 11.62% | |
76 Outperform | $205.30B | 19.17 | 10.54% | 3.88% | -0.08% | -24.48% | |
74 Outperform | $58.37B | 9.61 | 38.11% | ― | 0.88% | 16.44% | |
73 Outperform | $192.05B | 11.00 | 18.27% | 5.88% | 0.61% | 50.39% | |
67 Neutral | $44.90B | 29.91 | 7.78% | 3.37% | 3.15% | -63.12% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% |
* Communication Services Sector Average
Performance Comparison
T
AT&T
26.64
10.34
63.44%
AMX
America Movil
14.09
-4.43
-23.92%
CHTR
Charter Communications
338.29
65.24
23.89%
CMCSA
Comcast
33.38
-6.01
-15.26%
VZ
Verizon
43.03
3.94
10.08%
TMUS
T Mobile US
248.11
89.45
56.38%
AT&T Earnings Call Summary
Earnings Call Date: Jan 27, 2025 | % Change Since: 17.25% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in mobility and fiber, significant capital investments, and improved financial performance. However, there were challenges in the Business Wireline segment and the ongoing transition from legacy copper networks. Overall, the positive aspects of the call, including subscriber growth and financial strength, outweigh the negatives.Highlights
Strong Mobility Performance
AT&T achieved 1.7 million postpaid phone net additions with service revenue growth of 3.5%. They expect to lead the industry in postpaid phone churn for the 14th time in the last 16 quarters.
Fiber Subscriber Growth
AT&T added 1 million or more fiber subscribers for seven consecutive years. They were named America's fastest Internet by Ookla and achieved six consecutive quarters of positive broadband net adds.
Record Capital Investment
AT&T invested about $22 billion in capital investment last year, maintaining industry-leading levels of investment.
Financial Performance
Fourth quarter revenues increased by nearly 1%, driven by wireless service and equipment revenues, as well as broadband revenues. Adjusted EBITDA for the quarter was up 2.2%.
Cash Flow and Debt Reduction
Fourth quarter free cash flow was $4.8 billion, and AT&T reduced net debt by $8.8 billion for the full year.
Lowlights
Business Wireline Decline
Business Wireline revenues declined 10% in the fourth quarter, and EBITDA was down 22% due to secular declines in legacy services.
Challenges with Legacy Copper Network
AT&T is working on transitioning away from legacy copper network operations by the end of 2029, with cost savings expected as they evolve technology stacks.
Company Guidance
During AT&T's Fourth Quarter 2024 earnings call, guidance for the upcoming year was provided with a focus on maintaining strong operational performance and strategic investments. In 2025, AT&T plans to grow its 5G and fiber subscriber base, continuing the momentum from 2024, which saw 1.7 million postpaid phone net additions and 1 million or more AT&T Fiber subscribers added for seven consecutive years. The company aims to achieve a net debt to adjusted EBITDA ratio of 2.5 times by mid-2025, enabling the commencement of up to $10 billion in share repurchases as part of a broader $40 billion shareholder return plan. AT&T also targets $3 billion in cost savings by the end of 2027, facilitated by AI integration and the transition from legacy copper network operations. Capital investment is projected to remain around $22 billion, supporting network modernization and expansion. The guidance reflects a commitment to profitable growth and enhanced shareholder returns while emphasizing the importance of a durable franchise for long-term success.AT&T Corporate Events
Executive/Board ChangesShareholder Meetings
AT&T Director Glenn Hutchins Announces Departure
Neutral
Feb 5, 2025
Glenn H. Hutchins announced on January 30, 2025, that he will not seek re-election as a Director at AT&T’s 2025 Annual Meeting of Stockholders, although he will continue in his role until the meeting. This decision may impact AT&T’s board dynamics and strategic direction, influencing stakeholders and the company’s future governance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.