Back to top

Is AT&T (T) Stock Undervalued Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is AT&T (T - Free Report) . T is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 8.87 right now. For comparison, its industry sports an average P/E of 11.75. Over the past 52 weeks, T's Forward P/E has been as high as 13.31 and as low as 8.69, with a median of 10.64.

Another notable valuation metric for T is its P/B ratio of 1.07. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.49. Over the past 12 months, T's P/B has been as high as 1.92 and as low as 1.01, with a median of 1.57.

Finally, our model also underscores that T has a P/CF ratio of 3.62. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 3.74. Over the past 52 weeks, T's P/CF has been as high as 6.55 and as low as 3.41, with a median of 4.18.

Value investors will likely look at more than just these metrics, but the above data helps show that AT&T is likely undervalued currently. And when considering the strength of its earnings outlook, T sticks out at as one of the market's strongest value stocks.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

AT&T Inc. (T) - free report >>

More from Zacks Tale of the Tape

You May Like