Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 22 Sept 2026
T· Communication Services
AT&T
AT&T's valuation is enticing with a P/E of 7.5, but its low ROIC and high leverage raise concerns.
Buffett fit
Weak fit
Owner
43
Durability
28
Management
47
Price
99
Score updated 29 Oct 2026 · analysis from 22 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Communication Services stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning AT&T entirely, we'd focus on reducing , as the net debt/EBITDA is 2.5, and improving , which is 10.3% TTM.
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AT&T's durability is questionable, given its history of at least one loss year in the past five.
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AT&T's raises concerns, with a share count CAGR of -1.83% and a yield of 0.69% over 5 years.
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With a of 7.5 and an yield of 11.76%, AT&T appears undervalued.
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- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 7.5 indicates a low valuation relative to earnings.
- 2 yield of 11.76% suggests good cash flow generation.
- 3Dividend yield of 4.46% provides income to shareholders.
- 4Net margin of 17.5% is in the sector's top-quintile.
Concerns
5- 1 (5y avg) of 6.84% is below the sector's top-quintile cutoff of 11.7%.
- 2Net debt/EBITDA of 2.5 indicates high .
- 3Interest coverage ratio of 5.0 is just adequate.
- 4Dividend CAGR of -14.16% suggests instability in dividend policy.
Price history
$20.70+8.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
AT&T Inc. provides telecommunications and technology services globally, with segments in Communications and Latin America. The Communications segment offers wireless services and sells various devices. The company reported a TTM revenue of $125.65B and a net margin of 17.5%. The unit economics are challenged by a of 10.3%, below the sector top-quintile.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Communication Services
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