AT&T: Good Q1 Earnings, But Watch These Yellow Flags

Summary

• AT&T's Q1 results were positive, with EPS meeting expectations and revenue showing growth, driven by strong KPIs in the Mobility and Consumer Wireline segments.
• Mobility segment saw over 300,000 net adds, low churn, and increasing ARPU, while Consumer Wireline revenue rose 5% due to 19% fiber growth.
• Despite FX impacts and legacy service pressures, AT&T achieved a 2% YoY top-line growth, indicating potential for sustainable, albeit slow, future growth.
• Valuation is decent with a forward P/E of 12x and a free cash flow yield of 8%, but caution is advised due to multiple expansion and lower dividend yield.
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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.