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Essential Insights on T Stock for Investors

A strong performer from today's afternoon trading session is AT&T, whose shares rose 1.5% to $20.97 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.

AT&T's Earnings and Assets May Be Undervalued:

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 20.19 and an average price to book (P/B) ratio of 2.29. In contrast, AT&T has a trailing 12 month P/E ratio of 12.1 and a P/B ratio of 1.43.

AT&T's PEG ratio is 8.84, 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 (M) $170,756 $181,193 $143,050 $134,038 $120,741 $122,428
Operating Margins 15% 15% 6% 19% -4% 19%
Net Margins 11% 8% -4% 15% -7% 12%
Net Income (M) $19,370 $13,903 -$5,176 $20,081 -$8,524 $14,400
Net Interest Expense (M) $7,957 $8,422 $7,727 $6,716 $6,108 $6,704
Depreciation & Amort. (M) $28,430 $28,217 $22,523 $17,852 $18,021 $18,777
Diluted Shares (M) 6,806 7,348 7,466 7,503 7,587 7,258
Earnings Per Share $2.85 $1.89 -$0.75 $2.73 -$1.13 $1.97
EPS Growth n/a -33.68% -139.68% 464.0% -141.39% 274.34%
Avg. Price $17.99 $19.55 $18.98 $18.35 $17.72 $20.97
P/E Ratio 6.31 10.29 -25.31 6.62 -15.68 10.64
Free Cash Flow (M) $22,351 $29,033 $28,440 $26,412 $16,186 $20,461
CAPEX (M) $21,251 $19,635 $14,690 $15,545 $19,626 $17,853
EV / EBITDA 5.17 5.27 9.24 6.57 19.26 6.63
Total Debt (M) $176,505 $163,147 $157,245 $175,631 $135,890 $137,331
Net Debt / EBITDA 3.14 2.73 4.83 3.58 9.84 3.09
Current Ratio 0.8 0.79 0.82 1.61 0.59 0.71

AT&T has declining revenues and a flat capital expenditure trend, declining EPS growth, and not enough current assets to cover current liabilities because its current ratio is 0.71. On the other hand, the company has strong operating margins with a stable trend working in its favor. Furthermore, AT&T has positive cash flows and significant leverage levels.

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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