AT&T INC (1T.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1T - US00206R1023 - Common Stock
20.165 EUR
-0.28 (-1.35%)
1T gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 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
- In the past year 1T was profitable.
- 1T had a positive operating cash flow in the past year.
- 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
- With a decent Return On Assets value of 5.24%, 1T is doing good in the industry, outperforming 74.29% of the companies in the same industry.
- 1T has a better Return On Equity (20.02%) than 77.14% of its industry peers.
- 1T has a worse Return On Invested Capital (4.98%) than 68.57% of its industry peers.
- 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
- With an excellent Profit Margin value of 17.81%, 1T belongs to the best of the industry, outperforming 88.57% of the companies in the same industry.
- 1T's Profit Margin has improved in the last couple of years.
- 1T has a better Operating Margin (19.44%) than 65.71% of its industry peers.
- In the last couple of years the Operating Margin of 1T has grown nicely.
- 1T's Gross Margin of 59.67% is in line compared to the rest of the industry. 1T outperforms 51.43% of its industry peers.
- 1T's Gross Margin has improved in the last couple of years.
| 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 1T is destroying value.
- The number of shares outstanding for 1T has been increased compared to 1 year ago.
- 1T has less shares outstanding than it did 5 years ago.
- 1T has a better debt/assets ratio than last year.
2.2 Solvency
- 1T has an Altman-Z score of 0.85. This is a bad value and indicates that 1T is not financially healthy and even has some risk of bankruptcy.
- 1T has a worse Altman-Z score (0.85) than 68.57% of its industry peers.
- The Debt to FCF ratio of 1T is 6.99, which is on the high side as it means it would take 1T, 6.99 years of fcf income to pay off all of its debts.
- 1T has a better Debt to FCF ratio (6.99) than 62.86% 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 51.43% 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
- 1T has a Current Ratio of 1.01. This is a normal value and indicates that 1T is financially healthy and should not expect problems in meeting its short term obligations.
- With an excellent Current ratio value of 1.01, 1T belongs to the best of the industry, outperforming 85.71% of the companies in the same industry.
- 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 82.86% 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%.
- The Earnings Per Share has been decreasing by -8.79% on average over the past years.
- 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
- The Earnings Per Share is expected to grow by 5.70% on average over the next years.
- The Revenue is expected to grow by 2.26% on average over the next years.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- 1T is valuated reasonably with a Price/Earnings ratio of 11.14.
- Based on the Price/Earnings ratio, 1T is valued a bit cheaper than 74.29% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.21. 1T is valued rather cheaply when compared to this.
- The Price/Forward Earnings ratio is 10.49, which indicates a very decent valuation of 1T.
- Based on the Price/Forward Earnings ratio, 1T is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of 1T to the average of the S&P500 Index (25.98), we can say 1T is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.14 | ||
| Fwd PE | 10.49 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of 1T is on the same level as its industry peers.
- 74.29% of the companies in the same industry are more expensive than 1T, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.41 | ||
| EV/EBITDA | 6.33 |
4.3 Compensation for Growth
- 1T has a very decent profitability rating, which 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.