Is AT&T Inc. (T) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $21.80, AT&T Inc. (T) trades 24% below TickerWorth's blended fair value of $28.62 per share — a discounted-cash-flow model cross-checked against peer multiples and asset value — meaning the market currently prices T undervalued vs our estimate of what the business is intrinsically worth. Our fair value sits above the market, an implied +31.3% move to close the gap if the business performs in line with our assumptions. This is an educational model, not a price target or a recommendation — the value moves with the inputs, which you can test yourself using the WACC slider below.
One of the lenses behind that blended figure is a discounted-cash-flow model, which on its own values T at about $35.55 per share. The rest of this page walks through that DCF — its assumptions, reverse-DCF and discount-rate sensitivity — because it is the auditable anchor of the blend.
The valuation discounts AT&T Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 6.7%, with a long-run terminal growth rate of 2.0%. About 81% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -2.4% annual revenue growth for T. Our base case instead compounds to about 2.3% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, T's modeled DCF value ranges from about $15.74 to $100.63 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what AT&T Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of T's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind T's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $125,648,000,000 | AT&T FY2025 10-K (accession 0000732717-26-000120, filed 2026-02-09): Total operating revenues FY2025 (service $101,158M + equipment $24,490M); us-gaap:Revenues in the companyfacts feed ties. +2.7% vs FY2024 $122,336M. Unchanged as the base — the DCF grows this figure by forecast.revenue_growth, so 2026 belongs in the forecast. CROSS-CHECK: H1 2026 revenue was $63,064M, +2.6% on H1 2025's $61,473M (Q2 alone $31,558M, +2.3%), per the Q2 2026 10-Q. The first-half figure already includes the Lumen Mass Markets fiber CUSTOMERS acquired 2026-02-02; the acquired fiber NETWORK sits in a held-for-sale subsidiary reported as discontinued operations, so its revenue is not in this line (see net_debt). |
| Base EBIT margin | 19.2% | AT&T FY2025 10-K (accession 0000732717-26-000120, filed 2026-02-09): GAAP operating income $24,162M / revenue $125,648M = 19.23%. This is the reported line, and it carries $838M of 'asset impairments and abandonments and restructuring'; excluding that, 19.90%. AT&T's own adjusted operating income was $25.5B (20.3%). Operating income EXCLUDES $7,754M of FY2025 'other income (expense) – net' (largely the gain on the DIRECTV stake sale and non-cash pension credits) and $1,895M of equity-affiliate income — both excluded deliberately: they are not recurring cash from the network, and the remaining equity investments are credited in the net-debt bridge instead. CROSS-CHECK, H1 2026: operating income $13,696M / $63,064M = 21.72%, against 19.94% for H1 2025. Most of the +178bp is lower depreciation on fully depreciated copper assets (D&A fell $509M YoY in H1) plus Advanced Connectivity EBITDA up 6.8% — so the starting margin of the forecast is well above this base-year figure, and the forecast carries that. |
| Forecast revenue growth | 2% → 2% → 2% → 2% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model in the tracker. |
| Beta | 0.62 | Assumption — normalized estimate (Blume adjustment of the published 5Y-monthly beta): Published 5Y-monthly beta 0.431 (yfinance, read 2026-10-03). Normalized UP to 0.62 with the standard Blume adjustment (0.67 x 0.431 + 0.33 = 0.619), which pulls a regression estimate toward 1.0. CONSERVATIVE: it raises WACC and lowers the value. Reason: 0.43 is a low figure for a company whose debt and preferred claims exceed its equity market value (equity is ~48% of capital), and the 2021-22 WarnerMedia spin breaks the five-year return series. A bottom-up beta (unlevered telecom beta relevered at AT&T's leverage) would land higher still, ~0.75-1.0 — at 0.75 the value falls ~$3.80/share. Accepting the published 0.431 instead adds ~$6.50/share. |
| Terminal growth | 2.0% | Assumption — estimate (below the 2.5% house default, reason stated): 2.0%, half a point BELOW the 2.5% house default, deliberately. AT&T's revenue was $120.7B in FY2022 and $125.6B in FY2025 (us-gaap:Revenues), 1.3% a year; US wireless is saturated, and two new competitive fronts opened in 2026 (cable consolidation, and SpaceX's stated plan for a retail Starlink mobile service). A business that has grown below inflation for years should not be assumed to grow with nominal GDP forever. The house 2.5% would add ~$6.10/share. Well below the 6.67% WACC. |
| Diluted shares | 6,946M | AT&T Q2 2026 10-Q (accession 0000732717-26-000297, filed 2026-07-22): Q2 2026 weighted-average diluted shares 6,946M (H1 6,987M; FY2025 7,179M). The count is FALLING fast: AT&T bought back ~174M shares ($4,435M) in H1, guided ~$10B of repurchases for 2026 (raised from $8B on 2026-07-22), and had 6,852.4M shares outstanding on 2026-07-16. Using the Q2 diluted count rather than the lower outstanding figure is mildly conservative (~1.4%, ~$0.50/share); buybacks after June 30 are a use of the cash already counted in the forecast, so they are not netted again. |
| Market price | $21.80 | Delayed quote · as of 2026-11-10 05:01 UTC |
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