AT&T Soars 52.2% in a Year: Should You Invest in T Stock Now?
AT&T, Inc. T has gained 52.2% over the past year compared with the Wireless National industry's growth of 27.6%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500's growth of 12% and 12.1%, respectively.
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The company has outperformed its peers like Verizon Communications Inc. VZ and T-Mobile US, Inc. TMUS. Verizon has gained 6.1%, while TMUS has increased 36.6% during this period.
AT&T expects to continue investing in key areas and adjust its business according to the evolving market scenario to fuel long-term growth, while maintaining a healthy dividend payment and actively pruning debt. The company is adopting prpl Foundation's Life Cycle Management (LCM) to advance its broadband innovation initiatives. The prplware LCM is a software framework that effectively optimizes containerized application deployment on broadband gateways, utilizing the high computing capabilities of ARM-based chipsets. AT&T has steadily deployed the LCM solution over the past few years, and currently, around 12 million broadband gateways are integrated with LCM.prpl software with ARM-based chipsets eliminates the high CPU and memory usage issue of legacy containerized applications. The advanced system allows many applications to run concurrently in broadband gateways. This significantly improves efficiency. Moreover, prplware software supports multi-carrier application deployment, empowering service providers to offer several options to clients and developers. AT&T plans to increase its LCM adoption to foster innovation across the ecosystem.The company is set to acquire Lumen's fiber connectivity business for $5.75 billion. Following the completion of the buyout, AT&T will acquire 1 million fiber customers and 4 million fiber locations across 11 U.S. states. Integration of Lumen's customer base and fiber deployment capabilities will significantly boost AT&T's competitive edge in the fiber broadband domain. The company is aiming to expand its fiber network to approximately 60 million locations by 2030, almost doubling its current reach. Its expansion will target major metro areas such as Denver, Las Vegas, Minneapolis-St. Paul, Orlando, Phoenix, Portland, Salt Lake City, Seattle and more. The company's strategy of continuous innovation, adoption of leading-edge technology, combined with strategic acquisitions, is expected to foster long-term growth.
As of March 31, 2025, AT&T had $6.88 billion of cash and cash equivalents with long-term debt of $117.26 billion. At the end of the first quarter, the company had a current ratio of 0.7 compared to the preceding quarter's 0.67. A current ratio of less than 1 suggests that the company might face difficulty paying off its short-term obligations easily. Moreover, a high debt burden makes the company more vulnerable to economic downturns and hinders investment in growth initiatives.In a saturated U.S. wireless market, the spectrum crunch has become a major issue in the U.S. telecom industry. Most of the carriers are finding it increasingly difficult to manage mobile data traffic, which is growing by leaps and bounds. Moreover, intensifying competition with other industry giants like Verizon and T-Mobile is weighing on margins. T-Mobile's aggressive push for 5G expansion, solid cash flow growth and several strategic acquisitions to boost competitive edge is a concern for AT&T.
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AT&T is currently witnessing a downtrend in estimate revisions. Earnings estimates for 2025 have declined 3.27% to $2.07 over the past 60 days, while the same for 2026 has decreased 0.88% to $2.24. The negative estimate revision portrays bearish sentiments about the stock's growth potential.
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From a valuation standpoint, AT&T appears to be trading relatively cheaper compared to the industry but trading above its mean. Going by the price/earnings ratio, the company shares currently trade at 13.04 forward earnings, lower than 13.72 for the industry but above the stock's mean of 10.16.
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With a customer-centric business model, AT&T is witnessing healthy momentum in its postpaid wireless business with a lower churn rate and increased adoption of higher-tier unlimited plans. Strong focus on expanding fiber broadband network infrastructure through innovation and strategic acquisition is a positive factor.However, fierce competition in the wireless market with a relatively fixed pool of customers is putting pressure on pricing. High debt burden remains a concern. Downtrend in estimate revision highlights growing investor skepticism. With a Zacks Rank #3 (Hold), AT&T appears to be treading in the middle of the road, and new investors could be better off if they trade with caution. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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