AT&T Stock: Evaluating Its Value Amidst Record Gains
AT&T stock has surged 62% in the past year, but its elevated P/E ratio of 17 may not be too expensive compared to the S&P 500's average P/E multiple of 22. The telecom giant has reported solid earnings results and consistent growth, with its fiber net additions and postpaid phone net adds exceeding expectations. While it may not be cheap, AT&T's strong performance suggests it may continue to rally.
Ask Aime: Is AT&T's 62% year-over-year stock surge sustainable?
AT&T Inc. (T) has experienced a remarkable year, with its stock surging by 62% in the past 12 months. This impressive performance has been driven by solid earnings results and consistent growth across various segments. Despite its elevated Price-to-Earnings (P/E) ratio of 17, which is slightly higher than the S&P 500's average P/E multiple of 22, AT&T's strong performance suggests it may continue to rally.On April 28, 2025, AT&T reported a significant drop in trading volume, with $655 million in shares traded, marking a 34.31% decrease from the previous day. This decline placed AT&T at the 108th position in terms of trading volume among all stocks listed on the market [1]. Despite the drop in trading volume, AT&T's stock price managed to rise by 1.68% [1]. This resilience is indicative of the company's strong market position and diversified business model, which includes segments such as Communications and Latin America.
AT&T's stock performance has been closely watched by investors, with its market capitalization currently standing at $192.45 billion. The company's stock has a public float of 7.17 billion shares, indicating a high level of liquidity and investor interest. Over the past 52 weeks, AT&T's stock price has ranged from a low of $16.73 to a high of $29.03, reflecting the volatility and potential for growth in the telecommunications sector [1].
Analysts have noted that AT&T's stock has shown resilience in the face of market challenges, with its beta value of 0.59 indicating lower volatility compared to the broader market. This stability makes AT&T an attractive option for investors seeking reliable returns in a volatile market environment. Additionally, AT&T's strong market position and diversified business model contribute to its appeal as a long-term investment [1].
Looking ahead, AT&T's earnings estimates suggest a mixed picture. For the current quarter, AT&T is expected to post earnings of $0.53 per share, indicating a change of -7% from the year-ago quarter. The Zacks Consensus Estimate has changed 0% over the last 30 days. For the current fiscal year, the consensus earnings estimate of $2.10 indicates a year-over-year change of -7.1%, while the estimate for the next fiscal year is $2.24, indicating a change of +6.8% from what AT&T is expected to report a year ago [2].
AT&T's revenue growth is also a positive indicator. The consensus sales estimate for the current quarter of $30.41 billion indicates a year-over-year change of +2.1%. For the current and next fiscal years, $124.17 billion and $125.81 billion estimates indicate +1.5% and +1.3% changes, respectively [2].
Among the 28 analysts covering the stock, the consensus rating is a “Moderate Buy,” based on 17 “Strong Buy” ratings, three “Moderate Buys,” seven “Holds,” and one “Strong Sell.” This configuration is slightly more bullish than three months ago, with 16 “Strong Buy” ratings on the stock [3].
Tigress Financial recently raised AT&T's price target to $34 while maintaining a “Buy” rating. As of writing, AT&T's mean price target of $29.41 implies a modest 6.2% premium to current price levels, while the Street-high target of $34 suggests a staggering 22.7% upside potential [3].
In conclusion, AT&T's stock has shown impressive resilience and growth over the past year. While its P/E ratio may be elevated, the company's strong earnings results and consistent revenue growth suggest it may continue to rally. Investors should closely monitor AT&T's earnings reports and analyst ratings for further insights into its near-term performance.
References:
[1] https://www.ainvest.com/news/trading-volume-drops-34-31-placing-108th-market-ranking-1-68-stock-price-increase-2504/
[2] https://finance.yahoo.com/news/t-inc-t-trending-stock-130014992.html
[3] https://www.nasdaq.com/articles/att-stock-wall-street-bullish-or-bearish