QS Research · Michael Burry's Scion Capital analyst template · 2006
AT&T INC. (T)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -21% · downside -45% · upside +19%
On the section 13 base — normalized FY2023-FY2025 EBITDA of $42.31B, with TTM EBITDA of $43.62B shown beside it — 6.2x gives EV of $262.3B; less $125.33B net debt and $22.52B of leases leaves $114.5B, or $16.99/share, -21.4% versus $21.63 (N13, N21, N22, N23, N1). The same normalized EBITDA at 5.4x/7.6x gives $11.97/-44.7% and $25.79/+19.2%, so the long rule is not met and the short rule is not met either. The market is rightly focused on the $2.6B noncash Mexico impairment and SpaceX/T-Mobile competitive headlines, but it may be underweighting the 12.3% FCF yield, $9.30B of TTM buybacks and the raised 2026 adjusted EPS guide. I call it a watch: interesting, but the lease-adjusted normalized value still sits below today's price.
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 in FY2025 is a connectivity company: the Communications segment (Mobility, Business Wireline, Consumer Wireline) supplied approximately 97% of 2025 segment operating revenues and substantially all segment operating income, Latin America about 3% of revenues and under 1% of operating income, and wireless service alone was 54% of consolidated revenue in 2025. The FY2020 10-K describes a materially different company that still ran a WarnerMedia content segment (Turner, HBO, Warner Bros.) and a U.S. Video business; neither appears in the FY2025 segment list, with DIRECTV's remaining interest sold in July 2025 and Vrio sold in November 2021. Cycle shape from the XBRL series: revenue $143.05B (FY2020) to a $120.74B trough (FY2022) and $125.65B (FY2025), operating income $8.37B, -$4.59B, $24.16B over the same points, while operating cash flow never left a $38.31B-$43.13B band. The earnings swing is therefore not a cash-earnings swing; FY2022's -$8.73B net income sat next to $38.31B of operating cash flow and $18.02B of D&A.
- ✓ 2. Competitive advantage
AT&T has no clean durable advantage: it is one of several facilities-based wireless providers in every U.S. market, competes with cable and wireless broadband in broadband, and its legacy voice base keeps shrinking to less-regulated rivals that run newer networks with nonunion labor and fewer retirees. Scale and licences are real (one of three facilities-based providers in Mexico, ~133,030 employees, 43% unionized, ~477,000 retirees/dependents on the benefit rolls), but the cost side of that scale is a burden, not a moat. The record shows no stable margin: operating income ran from $8.37B (FY2020) to -$4.59B (FY2022) to $24.16B (FY2025), with net losses in FY2020 and FY2022, on revenue of $125.65B (FY2025) versus $143.05B (FY2020). Network spending is mandatory: capex $20.84B against D&A $20.89B in FY2025.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue rose 5.3% to $32,322M, led by Advanced Connectivity (+7.2%) and equipment (+12.1%), but operating income fell 33.1% to $4,095M and operating margin dropped to 12.7% from 19.9%, with operations and support up 20.6% on a noncash Mexico held-for-sale impairment, separation charges, higher equipment/bad-debt costs and acquired fiber costs. Advanced Connectivity operating margin improved to 25.9% and Legacy revenue fell 24.5%, while Mexico was classified held-for-sale pending a sale expected in Q1 2027. Cash fell to $10,767M at 9/30/26 from $18,234M at 12/31/25 after the spectrum acquisition and debt rose to $159,627M from $136,100M; buybacks continued.
- ✓ 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.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.