AT&T Stock Can Sink, Here Is How
AT&T (T) has stumbled before. It’s stock plunged > 30% in span of less than 2 months 2 times in multiple years, wiping out billions in market value, and erasing massive gains in single correction. If history is any guide, AT&T (T) stock isn’t immune to sudden, sharp downturns.
The Risk That Is Brewing
- High Debt Burden: Net debt-to-EBITDA reached 3.0x in Q3 2025 after spectrum purchases, with total debt at $139.5B, despite $4.9B Q3 FCF.
- Intense Competition: Postpaid churn rose to 0.92% in Q3 2025. T-Mobile added 830K postpaid adds in Q2 2025, versus AT&T’s 405K in Q3.
- Legacy Wireline: Business wireline revenues fell 9.3% in Q2 2025 to $4.3B. This ongoing decline is a drag, with copper being decommissioned by 2029.
The question isn’t where T stock goes, but how your portfolio is positioned. See how Trefis High Quality Portfolio and Empirical Asset Management prepare you.
Is Risk Showing Up In Financials Yet?
It certainly helps mitigate the risk if the fundamentals check out. For details on T Read Buy or Sell T Stock. Below are a few numbers that matter.
- Revenue Growth: 1.5% LTM and 0.6% last 3-year average.
- Cash Generation: Nearly 15.8% free cash flow margin and 19.9% operating margin LTM.
- Valuation: AT&T stock trades at a P/E multiple of 14.2
- Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and better margins
| T | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Integrated Telecommunication Services | – |
| PE Ratio | 14.2 | 23.6 |
|
|
||
| LTM* Revenue Growth | 1.5% | 5.4% |
| 3Y Average Annual Revenue Growth | 0.6% | 5.3% |
|
|
||
| LTM* Operating Margin | 19.9% | 18.7% |
| 3Y Average Operating Margin | 19.9% | 18.0% |
| LTM* Free Cash Flow Margin | 15.8% | 13.1% |
*LTM: Last Twelve Months
How Bad Can It Really Get?
Looking at T’s risk during major market sell-offs gives some perspective. The stock fell nearly 46% in the Global Financial Crisis and about 39% in the Dot-Com bust. During the inflation shock, it dropped roughly 37%, while the Covid downturn and the 2018 correction each saw declines around 30%. Even with solid fundamentals, T hasn’t been immune when broader markets stress. It’s a reminder that in times of panic, significant pullbacks are part of the game.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read T Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.