AT&T INC (1T.MI) Stock Fundamental Analysis
Europe - Euronext Milan - BIT:1T - US00206R1023 - Common Stock
20.165 EUR
-0.28 (-1.35%)
Taking everything into account, 1T scores 5 out of 10 in our fundamental rating. 1T was compared to 36 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.
- 1T had a positive operating cash flow in the past year.
- In multiple years 1T reported negative net income over the last 5 years.
- Each year in the past 5 years 1T had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of 1T (5.24%) is better than 77.78% of its industry peers.
- Looking at the Return On Equity, with a value of 20.02%, 1T is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
- The Return On Invested Capital of 1T (4.98%) is worse than 63.89% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for 1T is below the industry average of 7.93%.
| 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
- 1T's Profit Margin of 17.81% is amongst the best of the industry. 1T outperforms 88.89% of its industry peers.
- 1T's Profit Margin has improved in the last couple of years.
- 1T has a better Operating Margin (19.44%) than 69.44% of its industry peers.
- 1T's Operating Margin has improved in the last couple of years.
- 1T has a Gross Margin of 59.67%. This is comparable to the rest of the industry: 1T outperforms 52.78% 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 1T is destroying value.
- 1T has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for 1T has been reduced compared to 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 Altman-Z score of 0.85. This is in the lower half of the industry: 1T underperforms 69.44% of its industry peers.
- 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's Debt to FCF ratio of 6.99 is fine compared to the rest of the industry. 1T outperforms 66.67% of its industry peers.
- 1T has a Debt/Equity ratio of 1.16. This is a high value indicating a heavy dependency on external financing.
- 1T has a Debt to Equity ratio of 1.16. This is comparable to the rest of the industry: 1T outperforms 55.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 6.99 | ||
| Altman-Z | 0.85 |
ROIC/WACC0.75
WACC6.64%
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.
- 1T has a Current ratio of 1.01. This is amongst the best in the industry. 1T outperforms 86.11% 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 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.96 |
3. Growth
3.1 Past
- The earnings per share for 1T have decreased by -5.75% in the last year.
- The Earnings Per Share has been decreasing by -8.79% on average over the past years.
- Looking at the last year, 1T shows a small growth in Revenue. The Revenue has grown by 1.98% in the last year.
- 1T shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.56% yearly.
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.
- Based on estimates for the next years, 1T will show a small growth in Revenue. The Revenue will grow by 2.26% on average per year.
EPS Next Y-7.41%
EPS Next 2Y0.35%
EPS Next 3Y3.73%
EPS Next 5Y5.7%
Revenue Next Year2.29%
Revenue Next 2Y1.87%
Revenue Next 3Y1.92%
Revenue Next 5Y2.26%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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 11.08, which indicates a very decent valuation of 1T.
- Based on the Price/Earnings ratio, 1T is valued a bit cheaper than the industry average as 77.78% of the companies are valued more expensively.
- 1T is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
- A Price/Forward Earnings ratio of 10.37 indicates a reasonable valuation of 1T.
- Based on the Price/Forward Earnings ratio, 1T is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of 1T to the average of the S&P500 Index (24.32), we can say 1T is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.08 | ||
| Fwd PE | 10.37 |
4.2 Price Multiples
- 61.11% of the companies in the same industry are more expensive than 1T, based on the Enterprise Value to EBITDA ratio.
- 1T's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. 1T is cheaper than 72.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.39 | ||
| EV/EBITDA | 6.32 |
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 2Y0.35%
EPS Next 3Y3.73%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 4.47%, 1T is a good candidate for dividend investing.
- 1T's Dividend Yield is comparable with the industry average which is at 3.36.
- Compared to an average S&P500 Dividend Yield of 1.82, 1T pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.47% |
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
- 1T pays out 37.01% of its income as dividend. This is a sustainable payout ratio.
DP37.01%
EPS Next 2Y0.35%
EPS Next 3Y3.73%
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 11.08 and the Price/Book (PB) ratio is 1.51.
How financially healthy is AT&T INC?
The financial health rating of AT&T INC (1T.MI) is 4 / 10.