It hasn't been a great evening session for AT&T investors, who have watched their shares sink by -1.1% to a price of $24.88. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
AT&T Is Reasonably Priced:
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 18.22 and an average price to book (P/B) ratio of 1.86. In contrast, AT&T has a trailing 12 month P/E ratio of 8.2 and a P/B ratio of 1.58.
AT&T's PEG ratio is 1.76, 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.
Positive Cash Flows:
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $143,050 | $134,038 | $120,741 | $122,428 | $122,336 | $125,648 |
| Operating Margins | 6% | 19% | -4% | 19% | 16% | 19% |
| Net Margins | -4% | 15% | -7% | 12% | 9% | 17% |
| Net Income (M) | -$5,176 | $20,081 | -$8,524 | $14,400 | $10,948 | $21,953 |
| Net Interest Expense (M) | $7,727 | $6,716 | $6,108 | $6,704 | $212 | $403 |
| Depreciation & Amort. (M) | $19,028 | $17,634 | $17,852 | $18,593 | $20,421 | $20,746 |
| Diluted Shares (M) | 7,466 | 7,503 | 7,587 | 7,258 | 7,204 | 7,179 |
| Earnings Per Share | -$0.75 | $2.73 | -$1.13 | $1.97 | $1.49 | $3.04 |
| EPS Growth | n/a | 464.0% | -141.39% | 274.34% | -24.37% | 104.03% |
| Avg. Price | $18.98 | $18.35 | $17.72 | $16.78 | $22.67 | $25.16 |
| P/E Ratio | -25.31 | 6.62 | -15.68 | 8.52 | 15.21 | 8.28 |
| Free Cash Flow (M) | $28,440 | $26,412 | $16,186 | $20,461 | $18,508 | $19,442 |
| CAPEX (M) | $14,690 | $15,545 | $19,626 | $17,853 | $20,263 | $20,842 |
| EV / EBITDA | 10.47 | 6.98 | 19.87 | 6.08 | 7.25 | 6.82 |
| Total Debt (M) | $158,679 | $192,096 | $140,674 | $142,879 | $127,205 | $143,729 |
| Net Debt / EBITDA | 5.5 | 3.97 | 10.33 | 3.24 | 3.14 | 2.79 |
| Current Ratio | 0.82 | 1.61 | 0.59 | 0.71 | 0.66 | 0.91 |
