Is AT&T Inc. (T) overvalued?
On Equity Rank's model estimate, T trades 16% below its fair value. AT&T Inc. (T) last closed at $21.63; the multi-method model fair value is $25.66.
| Price | Model fair value | Price vs model |
|---|---|---|
| $21.63 | $25.66 | 16% below |
What the answer rests on
- 6 of 11 valuation methods put T's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, T's free cash flow would need to grow about -11.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 16.2% a year.
- T trades at 11.4 times its last year's earnings, against a median of 14.5 for 21 profitable Communication Services companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 60% below to 8% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind T's fair value · What prices assume · Other companies