QS Research · Michael Burry's Scion Capital analyst template · 2006
AT&T INC. (T)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -12% · downside -34% · upside 0%
Section 13's normalized EBITDA base is the right operating anchor, but I keep AT&T's own 6.2x TTM EV/EBITDA rather than its 5.4x-7.6x peer range, because the peer range would be a rerating without a separate non-valuation catalyst. On FY2020-FY2025 median EBITDA of $40.94B, 6.2x gives $19.07/share (-11.8% vs $21.63); on TTM EBITDA of $43.62B it gives $21.54 (-0.4%), so little of the call depends on the normalization. The market is already paying about 6.62x normalized EBITDA, above the 6.2x case multiple, and the SpaceX/Starlink 2027 entry plus the Q3 2026 reported debt load keep the risk/reward from meeting the long rule. The raised $2.40 adjusted EPS guide and buyback are real catalysts, but with downside to cycle-mean EBITDA at -33.6% this is a watch, not a long or short.
Key numbers
- Share price: $21.63
- Market cap: $145.71B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $128.85B
- EV / EBITDA (TTM): 6.2x
- P/E (TTM): 11.2x
The 15 boxes
- ✓ 1. Long-form business notes
AT&T's FY2025 10-K describes a two-segment connectivity company: Communications was approximately 97% of 2025 segment operating revenues and substantially all 2025 segment operating income, with Mobility, Business Wireline and Consumer Wireline; Latin America was approximately 3% of 2025 segment operating revenues and less than 1% of 2025 segment operating income. FY2025 revenue mix was 54% wireless service, 18% equipment, 13% fiber and advanced connectivity, 8% legacy and other transitional, 2% Latin America wireless service and 1% Latin America equipment. The oldest FY2020 10-K still reported WarnerMedia and a Video unit, while the latest FY2025 10-K reports only Communications and Latin America after the DIRECTV separation and the July 2025 sale of the remaining DIRECTV interest. S24 shows FY2020-FY2025 revenue of $143.05B to $125.65B and an FY2022 operating loss of $4.59B, so the reported cycle is not a smooth growth line.
- ✓ 2. Competitive advantage
AT&T has facilities-based wireless/fiber scale and a claimed brand, but the sources show no durable competitive advantage: multiple wireless licensees operate in each U.S. area, broadband is contested by cable and wireless broadband, legacy voice/data is shrinking, and less-regulated rivals are described as having cost advantages. The FY2020-FY2025 record is cyclical, with operating income swinging from -$4.59B in FY2022 to $24.16B in FY2025 and net income to common from -$8.73B to $21.89B. Capital needs are ongoing: FY2025 capex was $20.84B against $40.28B operating cash flow.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 5.3% to $32.3B (service $26.3B, +3.8%; equipment $6.0B, +12.1%), but GAAP operating income fell 33.1% to $4.1B on a $2.6B noncash impairment of the held-for-sale Mexico wireless business plus employee separation charges; adjusted operating income was $7.6B and adjusted EBITDA $12.5B, up 5.4%. Advanced Connectivity carried the quarter (revenue +7.2%, operating income +18.9%, EBITDA margin 41.8% flat), while Legacy revenue fell 24.5%. Free cash flow was $5.0B vs $4.9B a year ago, cash fell $7.5B to $10.8B while total debt rose to $159.6B after the spectrum deal, and management raised 2026 adjusted EPS outlook to about $2.40.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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