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AT&T's low valuation masks heavy debt and shrinking legacy revenue

10/14/2026

AT&T shares trade at 7.2 times earnings, a significant discount to the 22.3 times median for the S&P 500, while the stock has lost 8.8% over the past year against a 17.3% gain for the broader index.

This divergence leaves investors weighing whether the telecommunications giant represents a deeply discounted opportunity or a fair price for a stagnant operation.

The company's core business remains profitable, with AT&T retaining 20.6% of sales as operating profit over the last twelve months, slightly above the 18.5% median for the S&P 500.

The Communications segment drives this performance, accounting for 96% of fiscal 2025 revenue.

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