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AT&T Stock Bounces Back: A Closer Look

Bryce TuoheyAvatar
Written by Bryce Tuohey
Reviewed by Matt Monaco Fact-checked by Bryce Tuohey

AT&T Inc.’s stock price is likely benefitting from its significant advancements in 5G infrastructure and strategic partnerships, boosting market sentiment. On Monday, AT&T Inc.’s stocks have been trading up by 6.38 percent.

Key Highlights

  • RBC Capital recently upgraded AT&T’s stock rating, enhancing its growth outlook and prospects for shareholder returns. This positive reassessment comes amid new initiatives that align with AT&T’s strategic goals around fiber investment and cost reduction.

Candlestick Chart

Live Update At 14:32:29 EST: On Monday, January 27, 2025 AT&T Inc. stock [NYSE: T] is trending up by 6.38%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • AT&T has improved to a “Buy” status following Argus’ new price target and confidence in earnings boost. The company pivots back to core competencies, focusing on wireless and fiber services after stepping back from challenging acquisitions.

  • Completing a sale-leaseback deal, AT&T managed to generate $850M in upfront cash, leveraging a small segment of its central office facilities, which signifies strategic asset management.

  • With cyber threats looming, AT&T and fellow telecom giant Verizon have solidified network security post attacks, showcasing resilience even in uncertain digital landscapes.

  • Top analysts project mixed potential growth, noting recent investments and network upgrades as critical factors driving possible profitability in the near future.

Earnings and Financial Metrics Overview

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AT&T has recently shared its earnings report, and it paints an intriguing picture. Revenue figures touching $122.43 billion, though lower by comparison over a three to five-year span, indicate a business adapting to change. The company’s enterprise value stands around $305.42 billion, a testament to its standing in the telecom industry, but key concerns exist around their debt-equity ratio hovering at 1.43. Financial strength seems stretched with a current ratio of 0.7 and quick ratio at 0.3, hinting at challenges in meeting short-term obligations efficiently.

The focus turns towards profitability metrics. An EBIT margin of 16.1% coupled with an EBITDA margin stretching up to 32.5% shows areas of efficiency, though margins could benefit from strategic financial management. AT&T’s commitment to shedding legacy costs, reinvesting in fiber infrastructure, and enhancing customer satisfaction with compensatory measures for service disruptions augurs well for future prospects.

The latest financials revealed an operating cash flow exceeding $10 billion but with investing cash flows indicating continued outflows. This reflects the aggressive reallocation of resources towards sustainable, growth-oriented projects, notably fiber optic build-outs. That aligns with key strategic priorities AT&T has been advancing under fresh management directions.

More Breaking News

Recent Developments and Analysis

Upgrades and Strategic Realignment

This month, both RBC Capital and Argus improved their ratings for AT&T. The emphasis now lies on improving shareholder returns. Given their pivot back to core services—wireless and fiber—there’s a marked shift towards growth-oriented focus areas rather than risky acquisitions. Analysts are optimistic about the potential upswing in earnings facilitated by this strategic redirection.

Asset Monetization

Similarly, the completion of a sale-leaseback arrangement, netting over $850 million, marks a significant monetization of assets. This step not only frees up capital but suggests a shift towards a more agile, capital-light structure. These maneuvers potentially offer new depth in funding strategic initiatives, reducing balance sheet encumbrances.

Network Security and Consumer Trust

Amid an evolving cybersecurity threat landscape, the telecom giant has demonstrated resilience by robustly securing its networks following cyberattacks. Such responses foster customer trust and stabilize market perceptions, which could shield AT&T during challenging periods.

The upheld decision by regulatory bodies affecting net neutrality further upholds the current industry cadence, implicating how services might be structured without incremental compliance pressure. How AT&T navigates these regulatory waters will be a telling barometer for stakeholders.

Intraday Performance

AT&T’s trading patterns reflect a dynamic equilibrium, with recent intraday highs and lows oscillating—an indication of healthy volatility leveraged by investors focused on strategic entry and exit points. Share prices recently moved from an open of $23.50 to an impressive high of $24.365 before settling at $24.17 on the closing bell. Such fluctuations underline evolving market sentiment, often driven by recent organizational news and strategic announcements.

Summary

In recent weeks, AT&T has exhibited resilience and adaptive strategies, recalibrating its business ethos towards sustainable, growth-intensive domains such as fiber and wireless services. Analysts’ optimism, alongside strategic asset monetization and newfound cybersecurity assurances, finally provide AT&T with a runway for revival, sidestepping past acquisition woes. Traders may find value in these incremental shifts, although significant considerations around financial ratios and market agility remain as enduring focal points. As millionaire penny stock trader and teacher Tim Sykes says, “Small gains add up over time; focus on building wealth gradually, not chasing jackpots.” AT&T’s path forward is charted less by monumental leaps but rather through carefully measured, incremental stories of progress—an alignment that seemingly strikes at the heart of long-term growth potential.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”