AT&T's Stock Soars Amid Subscriber Gains and Buybacks

AT&T's stock has surged by 65% in 18 months, signaling strong subscriber gains and an upcoming buyback program, making it an attractive investment option. Investors are encouraged to consider this opportunity for growth.

Date: 24-01-2025

AI Rating: 7

AT&T's Strong Performance
AT&T has shown substantial stock growth, gaining 65% over the past 18 months, outpacing the S&P 500. Despite this rally, the stock remains undervalued at about 10 times its expected free cash flow of $16 billion, projected to grow annually through 2027. The company has transitioned back to being a purely telecom entity, focusing on wireless and fiber internet, which has resulted in consistent subscriber gains. Over the past two years, AT&T has added at least 350,000 net postpaid phone subscribers each quarter and 200,000 fiber subscribers, indicating strong business growth. Furthermore, AT&T is now prioritizing debt repayment and restarting its share buyback program, planning to invest up to $20 billion over three years in stock repurchases.

Unity's Challenges and Potential
In contrast, Unity is facing challenges, as its valuation appears high given its lack of profitability. The stock is valued around $9 billion, about five times expected revenue in 2024. Unity recently faced backlash leading to leadership changes and layoffs, but it is taking measures to improve its standing by scrapping unpopular fees and raising subscription prices. Its market share in game engines, particularly among developers, provides a long-term growth potential, depending on successful strategic execution.

Stocks: T U