AT&T Inc. (TBB) stock analysis

P/E below its 5-year median

AT&T's P/E of 7.1 is below its own 5-year median of 8.8.

P/E below the industry

AT&T's P/E of 7.1 is below the Telephone Communications median of 12.5.

EV/EBITDA below its 5-year median

AT&T's EV/EBITDA of 6.3 is below its 5-year median of 7.9.

P/S below the industry

AT&T's price-to-sales of 1.15 is below the Telephone Communications median of 1.33 (book value is negative, so we use sales).

Trading below fair value

The share price of $21.41 is below our fair value estimate of $33.04.

Margin of safety over 20%

The price is 35.2% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 1.3% a year over the last three fiscal years, short of the 10% we look for.

EPS growth over 3 years

Needs positive EPS three years ago and today.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew 2.6% over the last twelve months; the Telephone Communications median is 5.2%.

Guidance raised

AT&T raised its 2026 Legacy service revenue decline outlook on Jul 22, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity

Needs positive equity and five years of results.

Return on invested capital

Needs operating income and invested capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin above its 5-year average

Net margin was 16.9% over the last twelve months, against a 5-year average of 9.2%.

Net margin above the industry

AT&T's net margin of 16.9% is above the Telephone Communications median of 6.6%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 27.7% of total debt.

Interest not well covered

Operating income covers interest expense 3.6 times; we look for at least 5.

Short-term assets don't cover short-term debts

Current assets are 0.97 times current liabilities.

Elevated bankruptcy risk

The Altman Z-score is 0.85; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

AT&T paid dividends worth 5.2% of the share price over the last twelve months.

Yield above Treasuries

The 5.2% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 4.0% or more; AT&T yields 5.2%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Covered by earnings

Dividends take 37.2% of net income.

Covered by free cash flow

Dividends take 45.5% of free cash flow.