VALUATION HIGHLIGHTS
- Communication constitutes 98% of the Trefis price estimate for AT&T's stock.
WHAT HAS CHANGED?
Latest Earnings Update (Q4 2024)
AT&T published a better-than-expected set of Q4 2024 earnings, led by year-end promotions and bundled offerings. While revenue came in at $32.30 billion, up by 0.9% year over year adjusted earnings stood at $0.54 per share. The carrier added 482,000 postpaid phone subscribers over the quarter.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of AT&T's value that present opportunities for upside or downside to the current Trefis price estimate for AT&T.
Communication
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Mobility Revenues: AT&T's mobility business remains one of its most valuable segments, accounting for a bulk of the value of its communications business. Mobility revenues stood at $85 billion in 2024, driven by a rising postpaid wireless subscriber base and higher equipment-related revenues. We expect Mobility Revenues to grow to $98 billion by the end of our review period. However, if the metric increases to about $110 billion by the end of our review period, it could increase our price estimate by over 10%.
For additional details, select a driver above or select a division from the interactive Trefis split for AT&T at the top of the page.
BUSINESS SUMMARY
AT&T is a leading provider of telecommunications services. The company derives most of its revenues from its Communications business, which includes its wireless phone business and broadband. AT&T divested a majority of its pay TV, media, and advertising assets between 2021 and 2022 to focus on its core wireless business.
SOURCES OF VALUE
AT&T's Communications services units account for a majority of AT&T's value, given the company's large share of the U.S. wireless phone market. AT&T serves over 240 million customers, including wholesale and retail phones and connected devices.
KEY TRENDS
Carriers have essentially become mobile data providers
Mobile data usage has skyrocketed in the last few years due to the increasing proliferation of smartphones and related applications and services. Carriers have also been tailoring their plans based on the monthly amount of data offered while typically offering free unlimited voice and text.
Saturating wireless market
The U.S. wireless market is increasingly saturated, with the total number of wireless phone subscribers now exceeding the U.S. population. As a result, growth in high-value wireless phone connections is expected to slow. Carriers are now prioritizing retaining existing customers and winning over switchers while seeking incremental growth from connected devices, tablets, M2M connections, and wholesale services.
