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Don't Take a Position in AT&T Stocks Without Knowing Its Fundamentals!

AT&T logged a 0.7% change during today's morning session, and is now trading at a price of $16.57 per share.

AT&T returned losses of -8.9% last year, with its stock price reaching a high of $21.53 and a low of $13.43. Over the same period, the stock underperformed the S&P 500 index by -33.0%. As of April 2023, the company's 50-day average price was $15.77. AT&T Inc. provides telecommunications and technology services worldwide. Based in Dallas, TX, the large-cap Telecommunications company has 152,740 full time employees. AT&T has offered a 6.7% dividend yield over the last 12 months.

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.

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 $2.27, the company has a forward P/E ratio of 6.9. In comparison, the average P/E ratio for the Telecommunications sector is 23.78. On the other hand, the market is undervaluing AT&T in terms of its equity because its P/B ratio is 1.14. In comparison, the sector average is 3.46.

AT&T Has an Average Rating of Hold:

The 21 analysts following AT&T have set target prices ranging from $7.34 to $25.7 per share, for an average of $16.81 with a hold rating. As of April 2023, the company is trading -6.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.

AT&T has a very low short interest because 1.5% of the company's shares are sold short. Institutions own 56.9% of the company's shares, and the insider ownership rate stands at 0.07%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $10,280,664,560.

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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