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Does T Stock Deserve a Spot in Your Portfolio Ahead of Q1 Earnings?
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Key Takeaways
T's Q1 estimates stand at $31.22B in revenues and $0.55 EPS, with earnings estimate revisions trending upward.
T introduced new solutions and initiatives aimed at improving services and customer experience.
AT&T continues to face competition and operational challenges that may impact overall performance.
AT&T Inc. (T - Free Report) is scheduled to report first-quarter 2026 earnings on April 22, before the opening bell. The Zacks Consensus Estimate for revenues and earnings is pegged at $31.22 billion and 55 cents per share, respectively. The earnings estimate for AT&T for 2026 has increased 0.88% to $2.29 per share over the past 60 days, while the same for 2027 has remained unchanged at $2.52.
Image Source: Zacks Investment Research
Earnings Surprise History
The communications service provider delivered a four-quarter earnings surprise of 3.8%, on average.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts a likely earnings beat for AT&T for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AT&T currently has an ESP of +2.96% and a Zacks Rank #3.
During the quarter, AT&T introduced a Connected AI solution to expedite smart manufacturing processes. The Connected AI solution features advanced, Gen AI-powered modeling and analytics. The solution finds out bottlenecks in the process, identifies root causes and also provides recommendations to fix them.
T announced the launch of AT&T Guarantee for small businesses. First introduced in January 2025, the program is aimed at improving customer experience and AT&T’s service reliability. Small businesses depend on Internet connectivity for a multitude of reasons, such as payments, inventory management, customer interactions, running cloud tools and AI-powered applications. Hence, consistent connectivity is critical for running efficient operations. Amid this backdrop, AT&T Guarantee can be a major advantage for the business opting for AT&T services.
In the quarter under review, T introduced IoT Network Intelligence, a leading-edge solution designed to enhance enterprise visibility across its connected devices ecosystem. AT&T also launched an intuitive app to enable customers to manage wireless and home Internet in one place. Such an innovative product launch and a customer-focused approach will likely have a favorable impact on the first-quarter results.
In the to-be-reported quarter, AT&T completed the buyout of Lumen’s Mass Markets fiber business. The acquisition has added 1 million fiber customers and 4 million fiber locations across 11 U.S. states. This will likely boost commercial prospects in the fiber broadband market.
The company faces stiff competition in the U.S. telecom market from other major players such as Verizon Communications, Inc. (VZ - Free Report) and Charter Communications (CHTR - Free Report) . T-Mobile is a major competitor in the wireless market. Such factors can impact top-line growth.
The Zacks Consensus Estimate for revenues from the Communications segment, which accounts for the lion’s share of total revenues, is pegged at $30.02 billion, while revenues for the Latin America segment are projected at $1.04 billion.
Price Performance
Over the past year, AT&T has gained 0.7% against the industry’s decline of 9.4%, outperforming its peers like Charter but underperforming Verizon. Charter has declined 26.6%, while Verizon has improved 8.4% during this period.
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, AT&T appears to be trading relatively cheaper than the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 11.23 forward earnings, lower than 12.24 for the industry and the stock’s mean of 12.24.
Image Source: Zacks Investment Research
Investment Considerations
Strength in the Communications segment, backed by healthy demand for postpaid services, is a major growth driver. The company is also witnessing solid momentum in the fiber market. AT&T’s convergence strategy is paying off well. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. This higher switching friction lowers churn rate and boosts customer retention. It is taking a consistent and disciplined approach to pricing. It focuses on improving ARPU by offering converged solutions rather than just price hikes.
However, intense competition in the telecom market is a major hurdle for the company’s growth prospects. Verizon is actively expanding its fiber footprint nationwide with the strategic acquisition of Frontier and network expansion initiatives. Charter is committed to investing $7 billion to add 100,000+ miles of fiber-optic network infrastructure. The goal is to deliver symmetrical and multi-gigabit Internet services across 1.7 million locations. Charter boasts a massive network footprint consisting of 58.4 million fiber passings, 1 million-plus network miles and more than 300K fiber lit buildings. Such a strategy from competitors can undermine AT&T’s fiber expansion initiatives.
Amid this backdrop, AT&T is aiming to expand into other emerging markets to open up new revenue-generating opportunities. Collaboration with Mitsubishi to bring advanced 5G connectivity to the upcoming Mitsubishi Outlander SUV, partnership with Boldyn Networks and the Metropolitan Transportation Authority to expand 5G cellular connectivity inside underground subway tunnels in New York, reflects such an approach. This will likely boost its prospects in the long run.
End Note
AT&T is set to benefit from strong demand in the Consumer Wireline and Mobility Business. The growth is expected to be driven by wireless subscriber gains and strength in the fiber market. Focus on convergence strategy to improve churn and effort to venture into new growth markets to diversify revenue streams are positive factors.
However, weakness in the Business Wireline vertical is expected to hinder the top line to some extent. High debt burden remains a major concern. Stiff competition is straining the margin. With a Zacks Rank #3, AT&T appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.
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Does T Stock Deserve a Spot in Your Portfolio Ahead of Q1 Earnings?
Key Takeaways
AT&T Inc. (T - Free Report) is scheduled to report first-quarter 2026 earnings on April 22, before the opening bell. The Zacks Consensus Estimate for revenues and earnings is pegged at $31.22 billion and 55 cents per share, respectively. The earnings estimate for AT&T for 2026 has increased 0.88% to $2.29 per share over the past 60 days, while the same for 2027 has remained unchanged at $2.52.
Image Source: Zacks Investment Research
Earnings Surprise History
The communications service provider delivered a four-quarter earnings surprise of 3.8%, on average.
Image Source: Zacks Investment Research
Earnings Whispers
Our proven model predicts a likely earnings beat for AT&T for the first quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AT&T currently has an ESP of +2.96% and a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping the Upcoming Results
During the quarter, AT&T introduced a Connected AI solution to expedite smart manufacturing processes. The Connected AI solution features advanced, Gen AI-powered modeling and analytics. The solution finds out bottlenecks in the process, identifies root causes and also provides recommendations to fix them.
T announced the launch of AT&T Guarantee for small businesses. First introduced in January 2025, the program is aimed at improving customer experience and AT&T’s service reliability. Small businesses depend on Internet connectivity for a multitude of reasons, such as payments, inventory management, customer interactions, running cloud tools and AI-powered applications. Hence, consistent connectivity is critical for running efficient operations. Amid this backdrop, AT&T Guarantee can be a major advantage for the business opting for AT&T services.
In the quarter under review, T introduced IoT Network Intelligence, a leading-edge solution designed to enhance enterprise visibility across its connected devices ecosystem. AT&T also launched an intuitive app to enable customers to manage wireless and home Internet in one place. Such an innovative product launch and a customer-focused approach will likely have a favorable impact on the first-quarter results.
In the to-be-reported quarter, AT&T completed the buyout of Lumen’s Mass Markets fiber business. The acquisition has added 1 million fiber customers and 4 million fiber locations across 11 U.S. states. This will likely boost commercial prospects in the fiber broadband market.
The company faces stiff competition in the U.S. telecom market from other major players such as Verizon Communications, Inc. (VZ - Free Report) and Charter Communications (CHTR - Free Report) . T-Mobile is a major competitor in the wireless market. Such factors can impact top-line growth.
The Zacks Consensus Estimate for revenues from the Communications segment, which accounts for the lion’s share of total revenues, is pegged at $30.02 billion, while revenues for the Latin America segment are projected at $1.04 billion.
Price Performance
Over the past year, AT&T has gained 0.7% against the industry’s decline of 9.4%, outperforming its peers like Charter but underperforming Verizon. Charter has declined 26.6%, while Verizon has improved 8.4% during this period.
Image Source: Zacks Investment Research
Key Valuation Metric
From a valuation standpoint, AT&T appears to be trading relatively cheaper than the industry and below its mean. Going by the price/earnings ratio, the company shares currently trade at 11.23 forward earnings, lower than 12.24 for the industry and the stock’s mean of 12.24.
Image Source: Zacks Investment Research
Investment Considerations
Strength in the Communications segment, backed by healthy demand for postpaid services, is a major growth driver. The company is also witnessing solid momentum in the fiber market. AT&T’s convergence strategy is paying off well. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. This higher switching friction lowers churn rate and boosts customer retention. It is taking a consistent and disciplined approach to pricing. It focuses on improving ARPU by offering converged solutions rather than just price hikes.
However, intense competition in the telecom market is a major hurdle for the company’s growth prospects. Verizon is actively expanding its fiber footprint nationwide with the strategic acquisition of Frontier and network expansion initiatives. Charter is committed to investing $7 billion to add 100,000+ miles of fiber-optic network infrastructure. The goal is to deliver symmetrical and multi-gigabit Internet services across 1.7 million locations. Charter boasts a massive network footprint consisting of 58.4 million fiber passings, 1 million-plus network miles and more than 300K fiber lit buildings. Such a strategy from competitors can undermine AT&T’s fiber expansion initiatives.
Amid this backdrop, AT&T is aiming to expand into other emerging markets to open up new revenue-generating opportunities. Collaboration with Mitsubishi to bring advanced 5G connectivity to the upcoming Mitsubishi Outlander SUV, partnership with Boldyn Networks and the Metropolitan Transportation Authority to expand 5G cellular connectivity inside underground subway tunnels in New York, reflects such an approach. This will likely boost its prospects in the long run.
End Note
AT&T is set to benefit from strong demand in the Consumer Wireline and Mobility Business. The growth is expected to be driven by wireless subscriber gains and strength in the fiber market. Focus on convergence strategy to improve churn and effort to venture into new growth markets to diversify revenue streams are positive factors.
However, weakness in the Business Wireline vertical is expected to hinder the top line to some extent. High debt burden remains a major concern. Stiff competition is straining the margin. With a Zacks Rank #3, AT&T appears to be treading in the middle of the road, and new investors could be better off if they trade with caution.