AT&T (T) AI Stock Analysis

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AT&T

(NYSE:T)

69Neutral

AT&T's stock score reflects a stable financial position and robust technical indicators, bolstered by strong earnings call insights. The company's ability to generate cash flow and maintain a healthy dividend yield are key strengths. However, challenges such as high leverage and stagnating revenue growth need to be addressed. The strategic focus on fiber and customer acquisition is promising, but potential impacts from tariffs and increased churn pose risks.

Positive Factors

Financial Performance

The 1Q results were better than expected across all three segments in the context of revenue growth, customer metrics, and margins.

Share Repurchase

AT&T plans to begin share buybacks earlier than anticipated, with at least $3B completed by year-end.

Subscriber Growth

Post-paid phone net additions exceeded expectations, indicating strong customer growth.

Negative Factors

Operational Expenses

Expected elevated churn together with higher device upgrades could drive incremental operational expenses and free cash flow pressures.

AT&T (T) vs. S&P 500 (SPY)

Market Cap

$190.25B

Dividend Yield4.2%

Average Volume (3M)40.25M

Price to Earnings (P/E)16.2

Beta (1Y)0.20

Revenue Growth0.50%

EPS Growth-12.66%

CountryUS

Employees139,970

SectorCommunication Services

Sector Strength87

IndustryTelecommunications Services

Share Statistics

EPS (TTM)0.51

Shares Outstanding7,195,602,000

10 Day Avg. Volume34,922,216

30 Day Avg. Volume40,254,032

Financial Highlights & Ratios

PEG Ratio1.80

Price to Book (P/B)1.94

Price to Sales (P/S)0.00

P/FCF Ratio10.28

Enterprise Value/Market Cap1.77

Enterprise Value/Revenue0.69

Enterprise Value/Gross Profit4.25

Enterprise Value/Ebitda1.92

Forecast

1Y Price Target

$30.41

Price Target Upside11.27% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering19

AT&T Business Overview & Revenue Model

Company DescriptionAT&T Inc. is a leading telecommunications company headquartered in the United States. It operates primarily in the telecommunications sector, providing a wide range of services including wireless communications, broadband, and video services. AT&T is known for its extensive wireless network, catering to both consumer and business markets. The company also offers internet and pay-TV services, positioning itself as a comprehensive provider of communication solutions.

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 Key Performance Indicators (KPIs)

Any

Mobility: Postpaid Average Revenue Per User

Mobility: Postpaid Average Revenue Per User
Reflects the average income from each postpaid customer, indicating customer value and potential for upselling services.

Chart InsightsAT&T's postpaid ARPU has shown a notable upward trend since mid-2023, reflecting strategic gains in mobility and consumer wireline segments. This aligns with the company's strong start to 2025, driven by fiber expansion and customer acquisition efforts. Despite macroeconomic challenges and increased churn, AT&T's focus on mobility and fiber appears to be paying off, contributing to revenue growth and supporting their confidence in achieving 2025 financial targets. However, potential tariff impacts and competitive pressures remain risks to monitor.

Data provided by:

Main Street Data

AT&T Financial Statement Overview

Summary

AT&T displays a stable financial position with strengths in cash flow generation and profitability improvements. However, high leverage and stagnant revenue growth pose potential risks. Continued focus on cost management and debt reduction will be critical for sustaining long-term financial health.

Income Statement

Positive

AT&T's income statement reveals a stable revenue base with a slight increase in TTM revenue compared to the previous year. The gross profit margin for TTM is 64.54%, reflecting strong cost management. Net profit margin has improved to 9.64% in TTM, showing enhanced profitability compared to previous losses. However, revenue growth remains stagnant, and EBIT margin is lower than optimal at 15.86%, indicating room for operational efficiency improvements.

Balance Sheet

Positive

The balance sheet shows a high debt-to-equity ratio of 1.20 in TTM, indicating significant leverage, which could be a risk in volatile markets. However, the equity ratio is reasonably healthy at 30.14%, providing some balance. Return on equity is 9.89%, showing moderate efficiency in utilizing equity to generate profits.

Cash Flow

Positive

AT&T's cash flow statement is strong, with the operating cash flow to net income ratio at 3.40 in TTM, indicating robust cash generation relative to profits. Free cash flow growth is positive, and free cash flow to net income ratio is 1.64, showing a good ability to cover net income with free cash flow.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
122.93B	122.34B	122.43B	120.74B	134.04B	171.76B
	Gross Profit
79.33B	95.36B	72.31B	69.89B	73.63B	91.84B
	EBIT
19.49B	19.05B	23.46B	-4.59B	25.90B	6.41B
	EBITDA
45.22B	44.02B	45.32B	21.07B	53.72B	33.57B
	Net Income Common Stockholders
11.85B	10.95B	14.40B	-8.52B	20.08B	-5.18B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.88B	3.30B	6.72B	3.70B	19.22B	9.74B
	Total Assets
397.47B	394.80B	407.06B	402.85B	551.62B	525.76B
	Total Debt
143.59B	140.92B	154.90B	154.68B	195.83B	179.45B
	Net Debt
136.71B	137.63B	148.18B	150.98B	176.61B	169.71B
	Total Liabilities
275.63B	274.57B	287.64B	296.40B	367.77B	346.52B
	Stockholders Equity
103.74B	104.37B	103.30B	97.50B	166.33B	161.67B
Cash Flow		Free Cash Flow
19.49B	18.51B	20.46B	12.40B	25.43B	27.45B
	Operating Cash Flow
40.27B	38.77B	38.31B	32.02B	41.96B	43.13B
	Investing Cash Flow
-19.49B	-17.49B	-19.66B	-25.80B	-32.09B	-13.55B
	Financing Cash Flow
-17.45B	-24.71B	-15.61B	-23.74B	1.58B	-32.01B

AT&T Technical Analysis

Technical Analysis Sentiment

Positive

Last Price27.33

Price Trends

50DMA

27.03

Positive

100DMA

25.40

Positive

200DMA

23.16

Positive

Market Momentum

MACD

0.04

Positive

RSI

51.46

Neutral

STOCH

20.85

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For T, the sentiment is Positive. The current price of 27.33 is above the 20-day moving average (MA) of 27.29, above the 50-day MA of 27.03, and above the 200-day MA of 23.16, indicating a bullish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 51.46 is Neutral, neither overbought nor oversold. The STOCH value of 20.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VZ	78 Outperform	$178.56B	10.06	18.23%	6.37%	0.93%	56.97%
CMCSA	76 Outperform	$129.04B	8.48	18.57%	3.65%	1.33%	7.69%
CHTR	75 Outperform	$116.18B	11.63	36.94%	―	0.93%	16.06%
TMUS	73 Outperform	$269.49B	23.13	19.35%	1.30%	5.31%	38.46%
AMX	71 Outperform	$53.04B	31.81	8.54%	2.91%	0.19%	-49.68%
T	69 Neutral	$190.25B	16.24	11.38%	4.20%	0.50%	-12.66%
Sector *	60 Neutral	$14.02B	6.62	-2.88%	3.71%	2.35%	-37.08%

* Communication Services Sector Average

Performance Comparison

AT&T

27.33

10.89

66.24%

AMX

America Movil

17.32

-1.82

-9.51%

CHTR

Charter Communications

419.57

142.03

51.17%

CMCSA

Comcast

35.33

-2.76

-7.25%

Verizon

43.48

5.77

15.30%

TMUS

T Mobile US

240.16

78.86

48.89%

AT&T Earnings Call Summary

Earnings Call Date:Apr 23, 2025

(Q1-2025)

% Change Since: 1.37%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

AT&T started 2025 with strong performance in mobility and consumer wireline, driven by strategic investments in fiber and customer acquisition. However, challenges such as declining business wireline revenues and potential impacts from tariffs and increased churn present notable concerns.

Q1-2025 Updates

Positive Updates

Solid Start to 2025

AT&T reported growth in consolidated service revenue and adjusted EBITDA, driven by strong postpaid phone and fiber net adds. Adjusted EPS and free cash flow also increased when excluding DIRECTV.

Fiber Expansion Success

AT&T is on track to exceed its target of passing over thirty million total locations with its fiber network by midyear 2025, ramping towards fifty million plus by 2029.

Strong Mobility and Consumer Wireline Performance

Total mobility revenues were up 4.7% year over year, with service revenues up 4.1%. Consumer wireline revenue grew by 5.1% year over year, driven by fiber revenue growth of 19%.

Successful Cost Management

AT&T reduced net debt by about one billion dollars in Q1 and plans to begin share repurchases this quarter, targeting at least three billion dollars by year-end.

Negative Updates

Business Wireline Revenue Decline

Business wireline revenues declined approximately 9% year over year, primarily due to continued pressures on legacy and other transitional services.

Potential Impact of Tariffs

The announced tariffs could potentially increase the cost of smartphones, network, and technical equipment, impacting consumer and business demand.

Higher Upgrade Rates and Churn

AT&T saw an acceleration in consumer upgrade behavior and an increase in churn due to normalization and competitive offers, potentially impacting margins.

Company Guidance

During AT&T's First Quarter 2025 Earnings Call, the company provided guidance on several financial metrics. They reported a 2% increase in total revenues and a 1.2% rise in service revenues, with adjusted EBITDA growing by 4.4%. Adjusted EPS reached $0.51, marking a $0.03 increase from the previous year when excluding DIRECTV. The company's free cash flow for the first quarter was $3.1 billion, up by over $350 million on a comparable basis. Capital investment was reported at $4.5 billion. AT&T expects second-quarter capital investment to be between $4.5 billion and $5 billion and anticipates approximately $4 billion in free cash flow. The full-year free cash flow guidance remains at $16 billion plus. Growth was driven by strong performance in mobility and consumer wireline businesses, with postpaid phone net adds of 324,000 and fiber net adds of 261,000. The company also highlighted a strategic focus on customer acquisition and retention, emphasizing the benefits of their fiber and 5G playbook. Despite macroeconomic uncertainties, AT&T remains confident in achieving its financial targets for 2025 and plans to commence share repurchases in the second quarter, with at least $3 billion to be completed by year-end.

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.