T
AT&T INC.NYSEValuation snapshot
Below bear casePrice is below even the bear case.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives T's base case?
base-case thesisWireless pricing, steady customer additions, and rapid fiber growth keep companywide sales rising modestly. The decline of older business services remains a drag, but fiber scale and cost reductions broadly offset it. Network spending stays high while producing enough cash to support the central outlook.
What shapes the assumptions
Wireless service growth
Q2 2026 wireless service revenue increased 0.033 year over year
Raises revenue growth
Advanced home-internet expansion
Q2 2026 advanced home-internet revenue increased 0.273
Raises revenue growth
Advanced Connectivity scale
Q2 operating-income margin rose from 0.222 to 0.257
Raises operating margin
Continuing legacy losses
Q2 legacy revenue declined 0.259
Lowers operating margin
Sustained network investment
2026 capital-investment guidance is $23 billion-$24 billion
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
The market is pricing this as if revenue grows -16.1% a year. There is not enough reported history to say how that compares with what it has actually done.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 8.8% operating margin, against the 22.0% assumed here.
- How confident is this estimate?
- Robustness 53.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. Mobility service revenue, annual
Measures recurring wireless-service sales, AT&T's largest and most stable operating revenue stream.
$67B
reported2. Communications operating-income margin, annual
Tracks the profitability of the segment producing nearly all of AT&T's operating income.
23.1%
reported3. Consumer broadband revenue, annual
Measures whether fiber and fixed-wireless growth is overcoming the decline in copper-based broadband.
$12B
reported4. Capital investment, annual
Measures the cash committed to network capacity, fiber expansion, modernization, and vendor-financed assets.
$22B
reported5. Postpaid phone churn, annual monthly average
Measures the average monthly loss of valuable postpaid-phone customers and therefore the durability of wireless revenue.
0.9%
reportedBase inputs from financials
source period →Base revenue (TTM)
$127.2B
Diluted shares
6,946,000,000
Net cash
-$58.5B
Bear
low confidence$44.33
IV / share
+69.3% vs $26.19
- Explicit cash flows
- $9.51
- Terminal value
- $43.24
- Net cash
- -$8.43
- Intrinsic value / share
- $44.33
97.5% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth1.5% → 1.2% → 1.0% → 0.8% → 0.7%medium
How derived: Recent quarterly revenue growth exceeded 0.02, but this case assumes fiber and wireless gains fade as shrinking legacy services increasingly offset them.
Why this confidence: Current segment disclosures quantify both growth and decline ↑, Five-year competitive and pricing outcomes remain uncertain ↓
Measured by
- Mobility service revenue, annual$67Breported
- Consumer broadband revenue, annual$12Breported
- Capital investment, annual$22Breported
- Postpaid phone churn, annual monthly average0.9%reported
Evidence for
- Legacy-segment revenue fell 0.259 year over year in the second quarter of 2026, while business transitional and other revenue fell 0.166.[AT&T Q2 2026 operating schedules]· primary
Evidence against
- Second-quarter 2026 total revenue grew 0.023 and Advanced Connectivity service revenue grew 0.051.[AT&T Q2 2026 earnings release]· primary
Operating margin20.0%medium
How derived: Consolidated quarterly profitability recently exceeded 0.21, but this case assumes customer-acquisition costs, legacy contraction, and sustained network spending pull the long-run result back to 0.20.
Why this confidence: Recent GAAP profitability is directly reported ↑, Legacy-network cost removal may differ from management's plan ↓
Measured by
- Communications operating-income margin, annual23.1%reported
- Consumer broadband revenue, annual$12Breported
- Postpaid phone churn, annual monthly average0.9%reported
Evidence for
- AT&T reported higher advertising, customer, bad-debt, and network costs during the first half of 2026.[AT&T Q2 2026 Form 10-Q]· primary
Evidence against
- Advanced Connectivity's second-quarter operating-income margin improved from 0.222 in 2025 to 0.257 in 2026.[AT&T Q2 2026 Form 10-Q]· primary
Tax rate25.5%medium
How derived: AT&T's effective rate ranged widely around the 0.21 federal rate, so the bear case uses 0.255 to allow for state taxes and fewer favorable discrete items.
Why this confidence: Multi-year effective tax rates are disclosed ↑, Large discrete tax items make individual years noisy ↓
No tracked driver measures this assumption yet.
Evidence for
- AT&T's effective tax rate was 0.266 in 2024, when nondeductible impairment charges raised the reported rate.[AT&T 2025 Form 10-K]· primary
Evidence against
- The effective tax rate was 0.213 in 2023 and 0.134 in 2025, although the latter benefited from a tax-free DIRECTV gain and discrete benefits.[AT&T 2025 Form 10-K]· primary
Reinvestment rate22.0%medium
How derived: With annual capital investment guided to $23 billion-$24 billion, this case assumes cost overruns and weaker returns require retention of 0.22 of after-tax operating profit.
Why this confidence: Near-term capital guidance is explicit ↑, Net reinvestment depends on depreciation and working-capital timing ↓
Measured by
- Capital investment, annual$22Breported
Evidence for
- Second-quarter capital investment rose from $5.1 billion in 2025 to $6.1 billion in 2026, and full-year guidance remained $23 billion-$24 billion.[AT&T Q2 2026 earnings release]· primary
Evidence against
- Management expects at least $18 billion of 2026 free cash flow despite the elevated investment program.[AT&T Q2 2026 prepared remarks]· primary
Terminal growth1.0%low
How derived: The continuing need for connectivity supports positive growth, but mature wireless penetration and persistent legacy-service losses justify only 0.01 beyond the explicit forecast.
Why this confidence: Mature-industry economics constrain the range ↑, The assumption extends indefinitely beyond visible guidance ↓
Measured by
- Mobility service revenue, annual$67Breported
Evidence for
- Business Wireline revenue declined 0.084 in 2025, and AT&T expects demand for legacy and VPN services to continue falling.[AT&T 2025 Form 10-K]· primary
Evidence against
- Management expects continuing revenue growth from fiber customers as it expands the fiber footprint.[AT&T Q2 2026 Form 10-Q]· primary
Base
low confidence$78.16
IV / share
+198.4% vs $26.19
- Explicit cash flows
- $12.05
- Terminal value
- $74.54
- Net cash
- -$8.43
- Intrinsic value / share
- $78.16
95.4% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.7% → 2.5% → 2.2% → 2.0% → 1.8%medium
How derived: Recent quarterly growth near 0.02-0.03 and management's low-single-digit service-revenue outlook support a path beginning at 0.027 and easing as fiber becomes larger.
Why this confidence: Assumption aligns with current results and company guidance ↑, Equipment sales and legacy declines make total revenue volatile ↓
Measured by
- Mobility service revenue, annual$67Breported
- Consumer broadband revenue, annual$12Breported
- Capital investment, annual$22Breported
- Postpaid phone churn, annual monthly average0.9%reported
Price implies: -16.1% vs our 2.2% — one of several sets that fit this price
Evidence for
- Management maintained low-single-digit consolidated service-revenue growth guidance after total second-quarter revenue grew 0.023.[AT&T Q2 2026 prepared remarks]· primary
Evidence against
- Business transitional and other revenue fell 0.166 in Q2 2026, showing that legacy losses remain a substantial offset.[AT&T Q2 2026 operating schedules]· primary
Operating margin22.0%medium
How derived: Q1 and Q2 consolidated margins were approximately 0.21 and 0.22, so the base case holds 0.22 as fiber scale and legacy cost removal broadly offset ongoing investment costs.
Why this confidence: Two recent quarters support the starting profitability level ↑, Segment reorganization and asset transactions reduce comparability ↓
Measured by
- Communications operating-income margin, annual23.1%reported
- Consumer broadband revenue, annual$12Breported
- Postpaid phone churn, annual monthly average0.9%reported
Price implies: 8.8% vs our 22.0% — one of several sets that fit this price
Evidence for
- Advanced Connectivity's operating-income margin increased to 0.257 in Q2 2026 from 0.222 one year earlier.[AT&T Q2 2026 Form 10-Q]· primary
Evidence against
- AT&T's consolidated full-year operating margin was only 0.192 in 2025, and Business Wireline recorded an operating loss.[AT&T 2025 Form 10-K]· primary
Tax rate24.0%medium
How derived: A normalized 0.24 rate sits above the 0.21 federal rate for state taxes but below the impairment-distorted 2024 effective rate.
Why this confidence: The normalized rate is anchored to federal and state taxation ↑, Tax settlements and asset transactions create recurring variability ↓
No tracked driver measures this assumption yet.
Evidence for
- AT&T reported effective tax rates of 0.213 in 2023 and 0.266 in 2024, bracketing a normalized rate near 0.24.[AT&T 2025 Form 10-K]· primary
Evidence against
- The 2025 effective rate was 0.134 because a DIRECTV gain was tax-free and discrete benefits were larger.[AT&T 2025 Form 10-K]· primary
Reinvestment rate15.0%medium
How derived: The base case retains 0.15 of after-tax operating profit because $23 billion-$24 billion of annual gross investment is partly offset by substantial depreciation and improving free cash flow.
Why this confidence: Multi-year capital guidance provides a clear spending anchor ↑, The model's net reinvestment measure is not identical to reported capital investment ↓
Measured by
- Capital investment, annual$22Breported
Evidence for
- Management expects annual capital investment of $23 billion-$24 billion during 2026-2028.[AT&T Q2 2026 earnings filing]· primary
Evidence against
- Management expects at least $18 billion of 2026 free cash flow, indicating that depreciation and operating cash generation offset much of gross capital spending.[AT&T Q2 2026 prepared remarks]· primary
Terminal growth2.0%low
How derived: A 0.02 perpetual rate reflects a mature essential-service provider whose fiber and wireless growth should modestly exceed continuing legacy attrition without outgrowing the broader economy.
Why this confidence: Essential connectivity demand supports positive long-run growth ↑, Perpetual growth lies far beyond management's forecast horizon ↓
Measured by
- Mobility service revenue, annual$67Breported
Evidence for
- AT&T's strategic plan targets sustained low-single-digit service-revenue growth, supported by wireless and fiber.[AT&T 2024 Analyst Day presentation]· primary
Evidence against
- Business Wireline revenue declined 0.084 in 2025 and legacy demand is expected to continue falling.[AT&T 2025 Form 10-K]· primary
Bull
low confidence$115.36
IV / share
+340.5% vs $26.19
- Explicit cash flows
- $14.59
- Terminal value
- $109.20
- Net cash
- -$8.43
- Intrinsic value / share
- $115.36
94.7% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth3.8% → 3.5% → 3.2% → 2.8% → 2.5%low
How derived: Advanced Connectivity service revenue grew 0.051 and home-internet revenue grew 0.273 in Q2 2026, supporting a bull path in which convergence and fiber remain strong enough to lift total growth above guidance.
Why this confidence: Current fiber and convergence indicators are strong ↑, The forecast exceeds management's consolidated growth range ↓
Measured by
- Mobility service revenue, annual$67Breported
- Consumer broadband revenue, annual$12Breported
- Capital investment, annual$22Breported
- Postpaid phone churn, annual monthly average0.9%reported
Evidence for
- Advanced Connectivity service revenue grew 0.051, advanced home-internet revenue grew 0.273, and internet net additions reached 646,000 in Q2 2026.[AT&T Q2 2026 operating schedules]· primary
Evidence against
- Management's own consolidated service-revenue outlook remains only low-single-digit growth.[AT&T Q2 2026 prepared remarks]· primary
Operating margin24.0%low
How derived: Advanced Connectivity reached a 0.257 quarterly margin, so the bull case assumes mix improvement and copper-network retirement lift consolidated profitability toward 0.24.
Why this confidence: The leading segment already exceeds the assumed target ↑, Achieving the target companywide requires substantial mix and cost improvement ↓
Measured by
- Communications operating-income margin, annual23.1%reported
- Consumer broadband revenue, annual$12Breported
- Postpaid phone churn, annual monthly average0.9%reported
Evidence for
- Advanced Connectivity's Q2 2026 operating-income margin was 0.257, while management expects fiber scale and copper retirement to improve economics.[AT&T Q2 2026 Form 10-Q]· primary
Evidence against
- Consolidated operating margin was 0.192 in 2025, and Business Wireline's operating margin was negative 0.047.[AT&T 2025 Form 10-K]· primary
Tax rate22.5%low
How derived: The bull case uses 0.225, modestly above the federal rate, assuming tax planning and investment incentives keep state and other additions limited.
Why this confidence: The assumption is close to a previously reported normal-year rate ↑, Future legislation and discrete tax items are unpredictable ↓
No tracked driver measures this assumption yet.
Evidence for
- AT&T's 2023 effective tax rate was 0.213, showing that a rate near the statutory federal level is achievable in a relatively normal year.[AT&T 2025 Form 10-K]· primary
Evidence against
- The effective rate rose to 0.266 in 2024 when nondeductible items reduced tax efficiency.[AT&T 2025 Form 10-K]· primary
Reinvestment rate10.0%low
How derived: The bull case retains only 0.10 of after-tax operating profit because management expects capital intensity to decline as the fiber footprint scales and legacy assets are retired.
Why this confidence: Management identifies declining capital intensity as a strategic objective ↑, Current spending is rising rather than falling ↓
Measured by
- Capital investment, annual$22Breported
Evidence for
- Management expects capital intensity to decline as revenue grows and fiber scales, and it cited mid-teens returns on fiber builds.[AT&T Analyst Day transcript]· primary
Evidence against
- Capital-investment guidance increased to $23 billion-$24 billion annually for 2026-2028.[AT&T Q2 2026 earnings filing]· primary
Terminal growth2.5%low
How derived: A 0.025 perpetual rate assumes fiber, fixed wireless, and mobility pricing sustain growth near long-run nominal economic expansion after legacy services become immaterial.
Why this confidence: Strategic mix is shifting toward growing connectivity products ↑, Perpetual growth near economic growth leaves little room for execution setbacks ↓
Measured by
- Mobility service revenue, annual$67Breported
Evidence for
- Management expects most legacy business revenue to be gone by the end of 2027, while fiber and advanced connectivity become a larger share of the company.[AT&T Analyst Day transcript]· primary
Evidence against
- AT&T operates in mature, competitive wireless and broadband markets, and its own medium-term service-revenue guidance is only low-single-digit growth.[AT&T 2024 Analyst Day presentation]· primary
Valuation robustness
reliability of the estimate, not a stock rating53 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 95% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The terminal growth assumption is low-confidence.→ terminal growth
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | -0.5% | 0.68 | -13.6% | 7.21B | 0.3% |
| Q1 2025 | 2.0% | 0.66 | 25.4% | 7.22B | 0.4% |
| Q2 2025 | 3.5% | 0.67 | 2.5% | 7.22B | 0.3% |
| Q3 2025 | 1.6% | 0.73 | 7.3% | 7.17B | -0.5% |
| Q1 2026 | 2.9% | 0.39 | -41.5% | 7.03B | -2.7% |
| Q2 2026 | 2.3% | 0.73 | 8.9% | 6.95B | -3.8% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The latest available 10-year nominal Treasury par yield is used as the U.S.-dollar risk-free rate.
The published market beta for AT&T is used as the equity sensitivity input rather than a fundamental forecast.
The trailing-12-month adjusted-payout implied premium for the U.S. market is used as the forward-looking price of equity risk.
The latest completed-session closing price is used because September 6, 2026 is not a trading day.
Generated 9/6/2026, 3:58:41 AM · pipeline v1.2.0