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Essential Facts About AT&T

AT&T shares fell by -1.3% during the day's evening session, and are now trading at a price of $16.41. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

AT&T Has an Attractive P/B Ratio but a Worrisome P/E Ratio:

AT&T Inc. provides telecommunications and technology services worldwide. The company belongs to the Telecommunications sector, which has an average price to earnings (P/E) ratio of 23.78 and an average price to book (P/B) ratio of 3.46. In contrast, AT&T has a trailing 12 month P/E ratio of -10.9 and a P/B ratio of 1.13.

AT&T's PEG ratio is 13.96, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

The Company's Revenues Are Declining:

2018 2019 2020 2021 2022 2023
Revenue (MM) $170,756 $181,193 $143,050 $134,038 $120,741 $121,749
Revenue Growth n/a 6.11% -21.05% -6.3% -9.92% 0.83%
Operating Margins 15% 15% 6% 22% -3% -2%
Net Margins 12% 8% 1% 16% 1% 1%
Net Income (MM) $19,953 $14,975 $1,355 $21,479 $1,469 $1,191
Net Interest Expense (MM) $8,450 $8,622 $7,850 $9,387 $6,108 $6,538
Depreciation & Amort. (MM) $28,430 $28,217 $22,523 $17,852 $18,021 $18,606
Earnings Per Share $2.85 $1.89 -$0.75 $2.73 -$1.13 -$1.4800000000000004
EPS Growth n/a -33.68% -139.68% 464.0% -141.39% -30.97%
Diluted Shares (MM) 6,806 7,348 7,466 7,503 7,587 6,612
Free Cash Flow (MM) $22,351 $29,033 $28,440 $26,412 $16,186 $19,803
Capital Expenditures (MM) $21,251 $19,635 $14,690 $15,545 $19,626 $17,481
Current Ratio 0.8 0.79 0.82 1.61 0.59 0.69
Total Debt (MM) $176,505 $163,147 $170,551 $175,631 $150,228 $144,147
Net Debt / EBITDA 3.14 2.73 5.26 3.33 9.82 8.7

AT&T suffers from declining revenues and a flat capital expenditure trend, weak operating margins with a negative growth trend, and declining EPS growth. The firm's financial statements also exhibit irregular cash flows and a highly leveraged balance sheet.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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