Behind AT&T’s Valuation after the 3Q17 Results
As of November 8, 2017, AT&T’s (T) market capitalization was ~$205.3 billion, making it the biggest US telecom company. Verizon Communications (VZ) has a market capitalization of ~$185.5 billion, while T-Mobile’s (TMUS) market capitalization is ~$46.8 billion, and Sprint’s (S) market cap is ~$24.0 billion.
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In the November 8 trading session, AT&T stock closed at $33.44, which is near its Bollinger Band mid-range level of $34.44. This indicates that AT&T’s stock is neither overbought nor oversold.
Short interest ratio
As of November 8, 2017, AT&T’s short interest as a percentage of its float (or short interest ratio) was ~6.61%. Normally, a short interest ratio of greater than 40% suggests that investors and traders foresee a correction in the stock’s price.
AT&T’s valuation metrics
On November 8, 2017, AT&T had a forward EV-to-EBITDA (enterprise value to earnings before interest, taxes, depreciation, and amortization) multiple of 6.1x. By contrast, Sprint, Verizon, and T-Mobile have forward EV-to-EBITDA multiples of 4.75x, 6.49x, and 6.46x, respectively.
As of November 8, 2017, AT&T was trading at a forward PE (price-to-earnings) multiple of 11.4x, while Sprint, Verizon, and T-Mobile have forward PE multiples of 200.8x, ~11.8x, and 20.6x, respectively.