AT&T (T) AI Stock Analysis

• Market Cap: $190.01B
• Dividend Yield: 4.21%
• Average Volume (3M): 48.00M
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.25
• Revenue Growth: -0.08%
• EPS Growth: -24.48%
• Country: US
• Employees: 140,990
• Sector: Communication Services
• Sector Strength: 98
• Industry: Telecommunications Services
• EPS (TTM): 1.49
• Shares Outstanding: 7,178,183,000
• 10 Day Avg. Volume: 49,724,276
• 30 Day Avg. Volume: 47,999,339
• PEG Ratio: N/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 Ratio: 3.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $28.36
• Price Target Upside: 7.14% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 23

AT&T's stock is supported by strong technical momentum and positive earnings call outlook, despite a high debt level. The strategic focus on 5G and fiber growth is expected to drive future profitability, while the attractive dividend yield provides a buffer against valuation concerns.

Positive Factors

Financial Performance

AT&T reiterated its annual $16bn+ free cash flow guide and shared 1Q25 FCF expectations of $2.8bn+, excluding DirecTV which will be divested.

Shareholder Returns

AT&T shared its shareholder return plans which include $20bn in dividends and $20bn of share buybacks over the next three years.

Strategic Growth

AT&T is in talks to acquire Lumen's consumer fiber operations for $5.5bn, suggesting strategic growth and expansion opportunities.

Negative Factors

Market Risks

There are recognized risks related to the new tariff environment and possible recession that could weigh on the company's performance.

Stock Performance

AT&T has been removed from Citi’s Focus List after recent price outperformance.

AT&T Business Overview & Revenue Model

Company Description

AT&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 Money

AT&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.

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.

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.

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

• Technical Analysis Sentiment: Neutral
• Last Price: 26.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 26.47 is below the 20-day moving average (MA) of 27.24, above the 50-day MA of 26.36, and above the 200-day MA of 22.25, 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMUS	82 Outperform	$291.03B	26.37	17.93%	1.24%	3.62%	38.24%
CMCSA	77 Outperform	$133.02B	8.49	19.24%	3.77%	1.78%	11.62%
T	76 Outperform	$190.01B	17.74	10.54%	4.21%	-0.08%	-24.48%
VZ	73 Outperform	$181.00B	10.35	18.27%	6.37%	0.61%	50.39%
CHTR	68 Neutral	$52.75B	9.14	38.11%	―	0.88%	16.44%
AMX	67 Neutral	$42.90B	27.89	7.78%	3.77%	3.15%	-63.12%
Sector *	58 Neutral	$27.01B	3.11	-10.53%	4.44%	2.30%	-43.13%

AT&T Corporate Events

AT&T Director Glenn Hutchins Announces Departure

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.