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How Does AT&T’s Valuation Multiple Compare to Its Peers’?

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AT&T’s scale

On May 21, AT&T’s (T) market cap was $236.5 billion. AT&T is the second-largest US wireless carrier in terms of market cap. T-Mobile’s (TMUS) market cap was $65.9 billion, while Sprint’s (S) market cap was $29.5 billion on May 21.

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Forward EV-to-EBITDA

On May 21, AT&T had a trailing-12-month EV-to-EBITDA (enterprise value-to-EBITDA) multiple of 6.85x compared to its peers. T-Mobile and Sprint had trailing-12-month EV-to-EBITDA multiples of 7.88x and 4.88x, respectively. On May 21, AT&T was trading at a 12-month forward EV-to-EBITDA ratio of 6.85x. T-Mobile’s and Sprint’s 12-month forward EV-to-EBITDA ratios were 7.12x and 5.17x, respectively.

Forward PE

On May 21, AT&T was trading at a 12-month forward PE ratio of 9.00x, while T-Mobile’s 12-month forward PE ratio was 18.23x. A company’s PE ratio indicates the amount investors are willing to pay per dollar of its EPS.

Analysts’ earnings estimates

AT&T’s adjusted EPS are expected to reach $3.58 in 2019, reflecting a ~1.7% rise on a YoY (year-over-year) basis. T-Mobile’s adjusted EPS are expected to reach $3.95 in 2019, reflecting a ~17.6% rise on a YoY basis. Analysts expect Sprint to post adjusted EPS of -$0.03 in fiscal 2019, which ends in March 2020.

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