AT&T INC (1T.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1T - US00206R1023 - Common Stock
20.165 EUR
-0.28 (-1.35%)
We assign a fundamental rating of 5 out of 10 to 1T. 1T was compared to 35 industry peers in the Diversified Telecommunication Services industry. Both the profitability and the financial health of 1T get a neutral evaluation. Nothing too spectacular is happening here. 1T is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- 1T had positive earnings in the past year.
- In the past year 1T had a positive cash flow from operations.
- In multiple years 1T reported negative net income over the last 5 years.
- 1T had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- Looking at the Return On Assets, with a value of 5.24%, 1T is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 20.02%, 1T is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 4.98%, 1T is doing worse than 66.67% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for 1T is below the industry average of 8.42%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.24% | ||
| ROE | 20.02% | ||
| ROIC | 4.98% |
ROA(3y)1.35%
ROA(5y)1.32%
ROE(3y)5.03%
ROE(5y)4.74%
ROIC(3y)5.19%
ROIC(5y)4.76%
1.3 Margins
- The Profit Margin of 1T (17.81%) is better than 86.11% of its industry peers.
- In the last couple of years the Profit Margin of 1T has grown nicely.
- Looking at the Operating Margin, with a value of 19.44%, 1T is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
- 1T's Operating Margin has improved in the last couple of years.
- 1T has a Gross Margin (59.67%) which is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of 1T has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.44% | ||
| PM (TTM) | 17.81% | ||
| GM | 59.67% |
OM growth 3Y0.54%
OM growth 5Y4.03%
PM growth 3Y-16.01%
PM growth 5Y2.75%
GM growth 3Y2.85%
GM growth 5Y2.22%
2. Health
2.1 Basic Checks
- 1T has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for 1T has been increased compared to 1 year ago.
- Compared to 5 years ago, 1T has less shares outstanding
- The debt/assets ratio for 1T has been reduced compared to a year ago.
2.2 Solvency
- Based on the Altman-Z score of 0.85, we must say that 1T is in the distress zone and has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.85, 1T is doing worse than 66.67% of the companies in the same industry.
- 1T has a debt to FCF ratio of 6.99. This is a slightly negative value and a sign of low solvency as 1T would need 6.99 years to pay back of all of its debts.
- 1T has a Debt to FCF ratio of 6.99. This is in the better half of the industry: 1T outperforms 63.89% of its industry peers.
- A Debt/Equity ratio of 1.16 is on the high side and indicates that 1T has dependencies on debt financing.
- 1T's Debt to Equity ratio of 1.16 is in line compared to the rest of the industry. 1T outperforms 52.78% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 6.99 | ||
| Altman-Z | 0.85 |
ROIC/WACC0.75
WACC6.63%
2.3 Liquidity
- A Current Ratio of 1.01 indicates that 1T should not have too much problems paying its short term obligations.
- 1T has a Current ratio of 1.01. This is amongst the best in the industry. 1T outperforms 83.33% of its industry peers.
- A Quick Ratio of 0.96 indicates that 1T may have some problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 0.96, 1T belongs to the top of the industry, outperforming 80.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
- 1T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.75%.
- 1T shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.79% yearly.
- The Revenue has been growing slightly by 1.98% in the past year.
- The Revenue has been decreasing by -7.56% on average over the past years.
EPS 1Y (TTM)-5.75%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%-10%
Revenue 1Y (TTM)1.98%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%1.64%
3.2 Future
- 1T is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.70% yearly.
- 1T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.26% yearly.
EPS Next Y-7.49%
EPS Next 2Y-0.05%
EPS Next 3Y3.36%
EPS Next 5Y5.7%
Revenue Next Year2.35%
Revenue Next 2Y1.92%
Revenue Next 3Y1.88%
Revenue Next 5Y2.26%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 11.14, which indicates a very decent valuation of 1T.
- 75.00% of the companies in the same industry are more expensive than 1T, based on the Price/Earnings ratio.
- 1T's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- 1T is valuated reasonably with a Price/Forward Earnings ratio of 10.49.
- 72.22% of the companies in the same industry are more expensive than 1T, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. 1T is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.14 | ||
| Fwd PE | 10.49 |
4.2 Price Multiples
- 1T's Enterprise Value to EBITDA is on the same level as the industry average.
- Based on the Price/Free Cash Flow ratio, 1T is valued a bit cheaper than 69.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.41 | ||
| EV/EBITDA | 6.33 |
4.3 Compensation for Growth
- The decent profitability rating of 1T may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-0.05%
EPS Next 3Y3.36%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.71%, 1T is a good candidate for dividend investing.
- 1T's Dividend Yield is a higher than the industry average which is at 3.26.
- Compared to an average S&P500 Dividend Yield of 1.81, 1T pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.71% |
5.2 History
- The dividend of 1T decreases each year by -10.97%.
Dividend Growth(5Y)-10.97%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 37.01% of the earnings are spent on dividend by 1T. This is a low number and sustainable payout ratio.
DP37.01%
EPS Next 2Y-0.05%
EPS Next 3Y3.36%
AT&T INC / 1T.MI FAQ
What is the ChartMill fundamental rating of AT&T INC (1T.MI) stock?
ChartMill assigns a fundamental rating of 5 / 10 to 1T.MI.
What is the valuation status for 1T stock?
ChartMill assigns a valuation rating of 6 / 10 to AT&T INC (1T.MI). This can be considered as Fairly Valued.
How profitable is AT&T INC (1T.MI) stock?
AT&T INC (1T.MI) has a profitability rating of 6 / 10.
What is the valuation of AT&T INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for AT&T INC (1T.MI) is 11.14 and the Price/Book (PB) ratio is 1.52.
How financially healthy is AT&T INC?
The financial health rating of AT&T INC (1T.MI) is 4 / 10.