AT&T returned losses of -18.1% last year, with its stock price reaching a high of $21.53 and a low of $14.46. Over the same period, the stock underperformed the S&P 500 index by -34.0%. As of April 2023, the company's 50-day average price was $17.4. AT&T Inc. provides telecommunications and technology services worldwide. Based in Dallas, TX, the large-cap Telecommunications company has 157,790 full time employees. AT&T has offered a 7.0% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $181,193 | $171,760 | $168,864 | $120,741 |
| Gross Margins | 53.6% | 53.5% | 52.7% | 57.9% |
| Operating Margins | 16.2% | 14.7% | 16.7% | 19.0% |
| Net Margins | 7.67% | -3.01% | 11.89% | -7.06% |
| Net Income (MM) | $13,903 | -$5,176 | $20,081 | -$8,524 |
| Net Interest Expense (MM) | -8,422 | -7,925 | -6,884 | -6,108 |
| Net Interest Expense (MM) | -$8,422 | -$7,925 | -$6,884 | -$6,108 |
| Depreciation & Amort. (MM) | -$28,217 | -$28,516 | -$22,862 | -$18,021 |
| Earnings Per Share | $1.89 | -$0.75 | $2.73 | -$1.18 |
| EPS Growth | n/a | -139.68% | 464.0% | -143.22% |
| Diluted Shares (MM) | 7,348 | 7,183 | 7,503 | 7,149 |
| Free Cash Flow (MM) | $29,233 | $27,455 | $25,430 | $12,397 |
| Capital Expenditures (MM) | -$19,435 | -$15,675 | -$16,527 | -$19,626 |
| Net Current Assets (MM) | -$295,189 | -$294,513 | -$307,770 | -$263,288 |
| Current Ratio | 0.8 | 0.82 | 0.7 | 0.59 |
| Long Term Debt (MM) | $151,709 | $153,775 | $152,820 | $128,423 |
| Net Debt / EBITDA | 2.79 | 4.58 | 2.85 | 6.83 |
AT&T suffers from declining revenues and a flat capital expenditure trend, slimmer gross margins than its peers, and declining EPS growth. The firm's financial statements also exhibit a deteriorating pattern of cash flows and a highly leveraged balance sheet. On the other hand, the company has average operating margins with a stable trend working in its favor.
AT&T does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $2.47, the company has a forward P/E ratio of 7.0. In comparison, the average P/E ratio for the Telecommunications sector is 18.85. On the other hand, the market is undervaluing AT&T in terms of its equity because its P/B ratio is 1.15. In comparison, the sector average is 3.12.
AT&T Has an Analyst Consensus of Strong Upside Potential:
The 21 analysts following AT&T have set target prices ranging from $9.0 to $28.0 per share, for an average of $20.73 with a buy rating. As of April 2023, the company is trading -16.1% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
AT&T has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 55.6% of the company's shares, and the insider ownership rate stands at 0.08%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 9% stake in the company is worth $9,801,960,111.
