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[IMAGE CREDIT: U.S. Air Force photo by Justin R. Pacheco and Edvin Richardson from Pexels via Canva] - SpaceX's connectivity business brought in $5.2 billion in the third quarter, up 69% year over year, which works out to about $21 billion a year. - On SpaceX's Oct. 20 earnings call, Elon Musk said he sees a clear path to connectivity revenue about ten times that size or more. - To get there, Starlink Mobile has to become a real U.S. carrier against AT&T, Verizon and T-Mobile, and service on its new spectrum doesn't start until early 2028. - Several hundred billion dollars a year is about what AT&T and Verizon took in combined in 2025, and Musk gave no date for reaching it. SpaceX (SPCX:NASDAQ) had a big third quarter for Starlink: connectivity revenue came in at $5.2 billion, up 69% year over year and 22% from the second quarter. Then Elon Musk raised the bar. On the earnings call, he said: "I can say we do see a clear path to several hundred billion dollars a year in connectivity revenue." That's a big number. And the path to it runs straight through AT&T (T:NYSE), Verizon (VZ:NYSE) and T-Mobile (TMUS:NASDAQ). Start with the math. $5.2 billion a quarter works out to about $21 billion a year. If "several hundred billion" means $200 billion at the low end, Musk is describing a connectivity business roughly ten times its current size. At $300 billion it's closer to 15x. Connectivity is growing fast enough that this sounds less wild than it might. Starlink added 1.6 million consumer subscribers in the quarter and reached 13.6 million. Consumer ARPU rose 5% from the second quarter to $69 a month, and enterprise and government revenue grew 91% year over year. Gross margin was 55%, with roughly 3 points of that coming from a one-time benefit. The Street is already thinking big too. Connectivity's $21 billion pace is close to half of the $45.9 billion analysts expect all of SpaceX to bring in this year. And consensus has the whole company at $249.4 billion by 2028. These estimates may not include the call yet. Since Musk didn't put a date on his number, I wouldn't expect it to change the next three years of estimates much. TIKR tracks 38 analysts on SpaceX. How many say "Buy"? See the full breakdown of Buy, Hold, and Sell ratings on SpaceX, along with Wall Street's revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See SpaceX's Analyst Ratings Plus: the piece that would get Starlink there is mobile. Starlink Mobile passed 22 million monthly users at the end of the quarter, up 37% from three months earlier. A few weeks ago, SpaceX got FCC approval to launch 15,000 Mobile V2 satellites and agreed to buy a portfolio of low-band spectrum. Gwynne Shotwell, SpaceX's president and COO, said that spectrum "will pave the way for Starlink Mobile to become a major mobile carrier in the U.S." That spectrum deal sent Verizon stock down 10% in a day. To see how big the prize is, look at AT&T. It brought in $126 billion in 2025, and analysts expect about $135 billion by 2028. That's about 2% growth a year. Starlink doesn't plan to light up its new spectrum until early 2028, so nothing on SpaceX's call should move AT&T's near-term numbers much. Verizon brought in $138.2 billion in 2025, so the two carriers together took in about $264 billion. Put differently, Musk's number would make Starlink connectivity about the size of AT&T and Verizon combined. Musk's figure covers all of connectivity, including enterprise and government, so not every dollar has to come from AT&T, Verizon and T-Mobile customers. But mobile is the piece SpaceX itself singled out, and it's the one with a plan and a date attached. Of course, Musk gave no timeline. He said SpaceX "should do a longer presentation on the game plan for Starlink connectivity," so the full case isn't public. The service itself is also a ways off. Shotwell said the near-term priority is flying the Mobile V2 constellation through next year and integrating the spectrum to turn on service in early 2028. Evercore's Kutgun Maral asked how that spectrum can compete with U.S. incumbents. Shotwell started her answer with WiFi: "I think it's something between 85% and 93% is done through WiFi." She expects the S-band to carry most of Starlink Mobile's traffic, with the low-band spectrum handling less but providing "a critical piece." It's a reasonable argument for why Starlink can get by with less spectrum than the incumbents, but nobody will know if it works until service starts. So can a business running at $21 billion a year really reach several hundred billion? Only if Starlink becomes a carrier on the scale of AT&T and Verizon combined, and that work has barely started. Still, the pieces SpaceX has in hand are real: 22 million mobile users, approval for 15,000 satellites, and spectrum of its own. My take: SpaceX doesn't need to hit Musk's number for connectivity to keep driving the stock. A business growing 69% a year with gross margins above 50% has plenty of room to run, even at a fraction of several hundred billion. The next clue comes on Oct. 21, when AT&T reports its third quarter and gets its first chance to respond. The real test starts when Starlink Mobile turns on service on its new spectrum in early 2028. TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what SpaceX could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use. Value SpaceX for free

For questions about this article or underlying research, email [email protected]. AT&T (T) shares fell 6.4% on October 21, 2026, the day the company reported fiscal Q3 2026. The S&P 500 rose 0.6% during the same session. That morning, AT&T raised its full-year profit outlook while leaving its free cash flow forecast and range for core profit growth untouched. So where did the higher outlook come from? AT&T's Higher Outlook Came From Lower Depreciation On the October 21 call, management said the raise primarily reflected lower depreciation under held-for-sale accounting for AT&T Mexico, a business the company has agreed to sell. AT&T now expects full-year adjusted EPS in the $2.40 range, up from its previous range of $2.25 to $2.35. That means most of the higher figure comes from how the company accounts for a departing business, rather than from adding customers or increasing sales. Earnings for the quarter beat forecasts, with adjusted EPS reaching $0.65 against a consensus of $0.61. Revenue matched expectations at $32.3 billion. Even so, the stock decline was far steeper than the drops its peers recorded during the same session. Verizon fell 2.2% and T-Mobile fell 2.5%. Did AT&T's Forecast For Its Business Change? Not by much. Management maintained its fiscal 2026 forecast for adjusted EBITDA growth, the company's core profit measure, at 3% to 4%. The company now expects to hit the upper portion of that range. The full-year free cash flow forecast stayed at $18 billion. This steady outlook follows a strong quarter. Service revenue grew 3.8% from a year earlier, marking what management called its best performance in more than four years. Adjusted EBITDA grew more than 5% for a second consecutive quarter. The fourth quarter looks harder. Management expects adjusted EBITDA growth in the period to suffer from year-over-year increases in marketing and other customer acquisition costs. These higher expenses are tied to an extended device launch cycle and a wider push to sell fiber. What AT&T Said About Fiber Prices Average revenue per fiber customer fell 4% from a year earlier in fiscal Q3 2026. Management tied the decline to introductory prices for new customers, discounts for subscribers who also buy AT&T wireless, and growth among lower-paying Quantum brand customers in territories acquired from Lumen. The company expects a similar year-over-year decline in the fourth quarter. AT&T is using lower prices to win households where it can later sell wireless service. By the end of the quarter, nearly 43% of its advanced home internet customers, a group including both fiber and Internet Air, also held a postpaid wireless account with the company. When the call turned to fiber prices in AT&T's established fiber markets, management said it did not want to focus on that alone, pointing to service revenue and customer growth. Average revenue per fiber customer is the figure to watch when AT&T reports fiscal Q4 2026, expected in January 2027. Is Too Much Of Your Wealth Riding On One Stock? One report just changed how AT&T looks to the people who own it. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Our partner advisory firm offers a free strategy review of ways to protect a concentrated position and unwind it with less tax. Request A Free Strategy Review Spot an error or want more like this? Tell us in 10 seconds.

- Verizon's sixth straight EPS beat and record 40.1% adjusted EBITDA margin show real momentum heading into a harder competitive fight. - SpaceX's $8 billion spectrum deal sent Verizon, AT&T, and T-Mobile among the S&P 500's top decliners the day it landed. - Whether churn holds at its record 84 basis points will signal if Verizon can maintain pricing power before Starlink Mobile launches in 2028. - Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor) Verizon (NYSE:VZ) reports third-quarter results on October 26, days after SpaceX (NASDAQ:SPCX) announced a roughly $8 billion deal for nationwide 800 MHz spectrum. I think the deal makes this report more important. It shows how much momentum Verizon carries into a harder fight. Last quarter, Verizon posted adjusted EPS of $1.30 against a $1.27 consensus, its sixth straight beat. Revenue slipped 0.7% to $34.25 billion as equipment revenue fell nearly 20%, a deliberate pullback on subsidies. The core business strengthened: 184,000 postpaid phone net adds, churn down to 0.92%, and a record 40.1% adjusted EBITDA margin. Management raised full-year adjusted EPS guidance to $4.99 to $5.04 and lifted the buyback target to up to $4.5 billion. Shares are up 16.94% year to date but down 4.89% over the past month. SpaceX's spectrum announcement put Verizon, AT&T (NYSE:T), and T-Mobile (NASDAQ:TMUS) among the top decliners in the S&P 500 the day it landed. Metric | Consensus | Prior Year | YoY Growth Q3 2026 EPS | $1.2743 | $1.21 | 5.31% Q3 2026 Revenue | $34.85 billion | $33.82 billion | 3.05% FY 2026 EPS | $5.0179 | $4.71 | 6.54% FY 2026 Revenue | $140.80 billion | $138.19 billion | 1.89% The Q3 EPS consensus has moved lower from $1.2925 90 days ago. If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life. Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor) Management guided mobility and broadband service revenue growth to approach 3% in Q3 and reach approximately 4% in Q4. I'll be watching that number first. Hitting it would show the subsidy-light Simplicity and Verizon One strategy can grow revenue while maintaining price. Churn comes next. Consumer postpaid phone churn fell to 84 basis points, which management called "a step change for Verizon." For comparison, Q3 2025 delivered just 36,000 postpaid net adds with churn of 0.98%. You should look at whether retention holds now that a deep-pocketed entrant has a credible path into U.S. mobile. The spectrum deal should close in the first half of 2027, and SpaceX plans to turn on service in early 2028. SpaceX said the spectrum could make Starlink Mobile "a major mobile carrier in the U.S." In July, Verizon estimated satellite's U.S. addressable market at 6 million to 8 million homes, mostly rural. I want to hear whether that framing changes now that SpaceX holds low-band spectrum built for indoor coverage. Finally, AI Connect. The Google (NASDAQ:GOOGL) dark fiber agreement is valued at over $1 billion, and management flagged more deals by year-end. SpaceX's threat is real, yet it sits more than a year away. That makes this report Verizon's chance to show that lower churn, combined bundles, and Frontier's fiber build a moat before a new carrier shows up. If service revenue speeds up and churn holds, Verizon heads into 2027 with its pricing power intact. If either slips, the market will treat it as early erosion, and the Starlink story will start to drive the stock. If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life. Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor) Contact [email protected] for any questions or corrections.

AT&T Inc. T outlined lower capital investment while maintaining its fiber expansion target on its third-quarter 2026 earnings call. Executives defended introductory broadband pricing to build converged relationships. Adjusted earnings of $0.65 beat the Zacks Consensus Estimate of $0.61, while revenues of $32.32 billion exceeded the $31.68 billion estimate. Analysts focused on fiber penetration, cash generation and competition. AT&T Inc. price-consensus-eps-surprise-chart | AT&T Inc. Quote Chief financial officer Pascal Desroches projected $22-$23 billion in annual capital investment during 2027 and 2028, about $1 billion below the prior plan. Desroches credited construction efficiencies and $300-$400 million in eliminated Mexico wireless investment, while retaining the target of more than 60 million fiber locations by 2030. AT&T raised its 2026 adjusted earnings outlook to about $2.4 per share from $2.25-$2.35, primarily reflecting lower depreciation related to Mexico's held-for-sale treatment. Free cash flow targets remain $18 billion-plus for 2026, $19 billion-plus for 2027 and $21 billion-plus for 2028. Desroches also warned of about $100 million in unfavorable vendor settlements and higher marketing costs during the fourth quarter. Chief executive officer John Stankey prioritized converged accounts over maximizing fiber revenue per customer. AT&T added approximately 350,000 such relationships, and 42.8% of advanced home internet customers also held postpaid wireless accounts. Advanced Connectivity delivered 769,000 Internet net additions, including 442,000 fiber connections. Desroches said that fiber average revenue per user fell 4% year over year due to introductory offers, convergence discounts and acquired Lumen customers. He expects a similar fourth-quarter decline. When asked by a UBS analyst about fiber penetration, Stankey mentioned that project economics assume 40% terminal penetration, but management intends to exceed that level. He considers 50% achievable over time, supported by greater convergence. A New Street Research analyst questioned working capital needs. Desroches explained that AT&T pays for customer devices upfront but recovers those costs over customer relationships, creating a cash drag as additions accelerate. Answering Morgan Stanley, Desroches said that excluding Mexico would reduce annual cash flow by $400 million to $500 million. Higher interest costs also absorb some benefits from reduced investment. Net debt to adjusted EBITDA rose to 3.13 times from 2.68 times sequentially after the $23 billion EchoStar spectrum acquisition. AT&T still targets around 2.5 times leverage during 2029. AT&T added 379,000 postpaid phone subscribers, while churn held at 0.92%. Desroches tied 5% wireless service revenue growth to subscriber gains and pricing, including 4% growth in postpaid phone average revenue per user. Asked by UBS about satellite competitors, Stankey defended terrestrial networks' scale and indoor coverage in dense markets, where AT&T has established infrastructure. He sees satellites serving sparse areas, not replacing scaled urban networks. Stankey also told New Street Research that fixed wireless could eventually decline as fiber expands. Stankey highlighted AWS and Microsoft arrangements to serve rising enterprise and data-center demand. He sees opportunities for higher-margin managed connectivity tied to AI workloads. Business fiber and advanced connectivity service revenues climbed 8.7% year over year, offsetting some pressure from declining transitional services. Copper retirement remains another management priority. More than 100 wire centers now have no legacy-service customers, and AT&T retains its target of $4 billion in annual companywide cost savings by the end of 2028. Stankey's approach combines broader fiber reach, more bundled customer relationships and disciplined investment returns. During questions from BNP Paribas, he framed potential fiber wholesaling as an option only after higher-value retail opportunities are exhausted. Management maintained its longer-term goals while acknowledging lower fiber pricing, customer acquisition spending and the cash burden of its network strategy. AT&T currently has a Zacks Rank #3 (Hold), a neutral near-term ranking. Its Value Score of A signifies favorable valuation attributes, while a Growth Score of C points to a less compelling growth profile. Its Momentum Score of B and VGM Score of B capture relatively favorable price-trend and blended value-growth-momentum characteristics. The scores complement rather than override the rank, with top combinations involving Zacks Rank #1 (Strong Buy) or #2 (Buy) stocks. The Zacks Rank could change as analyst earnings estimates are revised following the quarter. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

AT&T just posted Q3 2026 results that looked solid on paper, while the stock took a hit. The share price fell 6.5% in the first full trading session after the release, even as adjusted earnings per share printed at about US$0.65 and free cash flow for the quarter came in near US$5b. Investors came into today after a weak month for the stock and then reacted hard to this print. The real story sits in how that cash generation squares with AT&T's high debt load and the valuation investors are currently willing to pay. Like the cash generation but uneasy about AT&T's leverage and valuation hit? Check out the list of solid balance sheet and fundamentals stocks (25 results). - Total Revenue (Q3 2026 vs. Q3 2025): US$32,322m vs. US$30,709m (up about 5.3%) - Net Income from Continuing Operations, Excl. Extra Items (Q3 2026 vs. Q3 2025): US$892m vs. US$9,278m (sharply lower, reflecting a large year-on-year decline) - Basic EPS (Q3 2026 vs. Q3 2025): US$0.13 vs. US$1.30 (down about 90%) - Net Profit Margin, Trailing Twelve Months (to Q3 2026 vs. prior year): 10.2% vs. 17.8% (margin compressed over the last 12 months) Ask Charlie what AT&T's Lumen deal changed in the outlook. Bulls argue that AT&T's fiber heavy plan should steadily convert households into richer, stickier accounts. "The main thing that has to go right is that AT&T converts its fiber-led convergence and copper retirement plans into higher value converged accounts and lower legacy costs, without Lumen-related integration issues or device subsidy constraints dragging on results for too long." The latest quarter gives this idea real support. Advanced Connectivity service revenue rose 6.1% and segment EBITDA grew 7.3%. Converged accounts increased about 350,000 and over 1 million Advanced Connectivity net adds marked the best performance in more than four years. Bears worry that the same fiber and 5G investment spree will weigh on profitability and delay the earnings uplift. "While management points to a tipping point in copper retirement and outlines the ability to discontinue copper in a significant part of the footprint, the need to support overlapping copper and fiber networks during the transition, including central office and lease costs, risks keeping legacy expenses elevated and may limit net margin expansion." Q3 results still show that strain. Reported net income from continuing operations excluding extra items dropped sharply and basic EPS fell about 90%, even with adjusted EPS of roughly US$0.65. This highlights how transition costs and one offs are weighing on statutory profitability. Not everyone reads the same price the same way. → See the lower figure this Narrative lands on, and how it gets there. AT&T shows that an active earnings season and a sharp price reaction can diverge. The real opportunity is finding stocks that could be undervalued before the market corrects them. - Company 1 - 40% below our estimate - builds a premium tea chain leveraging a rapidly expanding membership base to deepen repeat purchases and lift average order values. - Company 2 - 47% below our estimate - turns a large backlog of data center and modular projects into higher utilization for complex mechanical and electrical contracting work. - Company 3 - 24% below our estimate - expands branded and private label coconut beverages while managing packaging and freight costs across retail, e-commerce and foodservice channels. Those are three of them. See the full list of 33 companies trading below our fair value estimates → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include T. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. - Total Revenue: Up 5.3% year over year in Q3 2026. - Service Revenue: Grew 3.8% year over year, best performance in more than four years. - Adjusted EBITDA: Grew 5.4% year over year; second consecutive quarter above 5% growth. - Adjusted EBITDA Margin: 38.7%, highest third-quarter consolidated margin since refocusing on advanced connectivity. - Adjusted EPS: $0.65, up 20% from $0.54 in Q3 2025. - Full-Year Adjusted EPS Outlook: Now expected in the $2.40 range (prior outlook $2.25$2.35). - Capital Investment: $5.6 billion in Q3, up roughly $300 million year over year; full-year outlook $23$24 billion. - Free Cash Flow: Approximately $5 billion in Q3, essentially stable year over year; Q4 expected at approximately $6 billion; full-year outlook $18 billion-plus. - Cash Taxes: Full-year outlook now in the $750 million range (prior $1$1.5 billion). - Advanced Connectivity Service Revenue: Grew 6.1% year over year; EBITDA up 7.3%. - Wireless Service Revenue: Grew 5% year over year; postpaid phone ARPU up 4%. - Postpaid Phone Net Adds: 379,000 in Q3; postpaid phone churn stable at 0.92%. - Advanced Home Internet Service Revenue: Grew more than 23% year over year. - Advanced Home Internet Net Adds: Record 696,000 combined, including 416,000 AT&T Fiber and 280,000 Internet Air net adds. - Fiber ARPU: Declined 4% year over year; similar decline expected in Q4. - Business Advanced Connectivity Service Revenue: Grew 2.5% year over year; Fiber and advanced connectivity service revenues up nearly 9%. - Legacy Segment: Service revenues declined approximately 25% year over year; EBITDA down about 27%. - Notable Adjustments: $2.6 billion non-cash impairment charge related to AT&T Mexico sale agreement; roughly $800 million employee separations charge (cash impact primarily in 2027). - Net Debt to Adjusted EBITDA: 3.13x, up from 2.68x in Q2, reflecting the $23 billion EchoStar spectrum purchase; targeted return to ~2.5x range during 2029. - Shareholder Returns: $4.8 billion returned in Q3, including $2.8 billion of share repurchases; over $7 billion repurchased year-to-date; targeting approximately $10 billion in 2026. - Cost Savings: On pace for $4 billion in annual consolidated cost savings by end of 2028. - Warning! GuruFocus has detected 2 Warning Signs with T. - Is T fairly valued? Test your thesis with our free DCF calculator. Release Date: October 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - AT&T Inc (NYSE:T) added over 1 million advanced connectivity subscribers in Q3 2026, the best quarter in more than four years, driven by fiber, fixed wireless, and postpaid phone growth. - Consolidated service revenue grew 3.8% year over year, the best performance in over four years, with adjusted EBITDA growth above 5% for the second consecutive quarter. - AT&T Inc (NYSE:T) achieved a record third-quarter adjusted EBITDA margin of 38.7% despite a 12% increase in dilutive equipment revenue, showcasing improved operating leverage. - The company expanded its fiber reach and converged customer relationships, with nearly 43% of Advanced Home Internet customers also having a postpaid wireless account, and added 350,000 converged accounts. - AT&T Inc (NYSE:T) raised its full-year adjusted EPS outlook to around $2.40 from $2.25-$2.35, driven by lower depreciation expense and strong operational performance. - Fiber ARPU declined 4% year over year due to introductory pricing, converged account discounts, and lower ARPU customers from the Lumen acquisition, with similar declines expected in Q4. - Legacy service revenues fell approximately 25% year over year, and legacy EBITDA declined 27%, reflecting the ongoing decline in copper-based services. - Net debt to adjusted EBITDA rose to 3.13 times from 2.68 times in the prior quarter, primarily due to the $23 billion spectrum purchase from EchoStar. - AT&T Inc (NYSE:T) expects higher marketing and customer acquisition costs in Q4, along with approximately $100 million in unfavorable vendor dispute settlements, which will impact adjusted EBITDA growth. - Free cash flow in Q3 was approximately $5 billion, essentially stable year over year, and the company faces working capital investments and higher cash interest payments, partly offsetting tax benefits. Q: John, on the fiber strategy, you had talked about a 40% penetration rate and now have aspirations to get to 50%. Is 50% still the expectation, and what are you seeing in the Lumen markets? Also, any high-level thoughts on the use of a LEO constellation to provide mobile service? A: CEO John Stankey said AT&T's investment economics assume a terminal penetration rate of 40%, but internal objectives are to exceed that, and he still believes 50% is achievable, leaning heavily on success with converged customers. In the Lumen markets, penetration is marching up consistent with the business case, and convergence has increased 250 basis points since the February close. On LEO, he said building a scaled converged network takes years and huge investment, noting AT&T runs six to eight low-band carriers per metro and that 40%-45% of traffic originates indoors, so satellite will help at the edges rather than replace terrestrial networks. Q: Can you share what you're seeing in broadband ARPU performance in mature fiber markets versus expansion markets, and do you see broadband returning to annual pricing power? What signals are you seeing from enterprises and hyperscalers on AI uptake? A: Stankey said AT&T wants a portfolio of customers at all discrete price points, and in mature markets it is now adding convergence-oriented price points, which dilutes average ARPU, but the focus should be on strong service revenue, account growth and margins. CFO Pascal Desroches noted AT&T had a meaningful fiber price increase as recently as last December. On AI, Stankey said enterprises need capacity and consistent performance across hybrid fixed, mobile and multi-cloud environments, with more demanding applications like robotics and warehouse autonomy likely to drive another investment layer. Q: Pascal, you mentioned working capital several times. How is the reinvestment of fiber CapEx efficiencies into working capital and interest expense allocated to building the business? A: Desroches confirmed promotion levels remain the same and customers ultimately bear higher device prices, but there is a timing element: AT&T pays upfront for phones, tablets and gateways and collects over the customer life, creating the working capital drain. Cash is also impacted by the Mexico asset disposition and higher cash interest, principally related to rates. Q: On CapEx, it came down about $1 billion for 2027 and 2028 while the free cash flow guide stayed the same. What else should we think about on the CapEx and free cash flow swings? A: Desroches said $300 million to $400 million of the CapEx reduction is Mexico Wireless CapEx, with the balance from efficiencies driven by scale, long-term partner contracts and faster, cheaper builds. On cash flow, the absence of Mexico costs roughly $400 million to $500 million annually, plus higher upfront device costs recovered over time and higher interest costs. Q: Given rising interest rates and smaller independent fiber builders struggling, is there an opportunity to pick up attractively priced assets in a consolidation cycle? A: Stankey said some builders mistakenly assumed they could build small fiber pockets without metro scale, and he remains open to acquisitions if the price is right and the footprint bridges to AT&T's network with operating and advertising scale. Lumen fit that bill; he would look at similar opportunities, but some market expectations are not consistent with his criteria. Q: On the wholesale fiber point, would you look for reciprocal fiber access from others as a precondition of wholesaling fiber? A: Stankey said wholesale does not mean opening up to all comers; it could mean wholesaling to strategically positioned partners, such as an exclusive MVNO relationship or a paired footprint outside AT&T's fiber territory. AT&T will first run its highest-value retail plays, and decisions can be made geographically rather than nationally, reflecting the recent reorganization of its consumer go-to-market structure. Q: On fiber ARPU, do you anticipate a similar decline in 2027 as we're seeing at the moment? A: Desroches said fourth-quarter fiber ARPU should be down year over year around the same rate as the third quarter, implying slight sequential moderation. Over the three-year guidance period, the vast majority of growth is expected to come from customer additions rather than pricing, with relatively stable ARPU overall. Q: How are you thinking about the potential rise of AI agents like Muse impacting the connectivity sector? Do you see this as a deflationary force and a catalyst for switching? A: Stankey said it is still early and AT&T is spending significant effort adapting, but good products with the right reputation and value will win. Philosophically, customers get to choose how their service is used, and account ownership and authorization principles will apply to agents, with identity validation and two-factor authentication for major transactions to prevent fraud. He expects agents to be another way for customers to right-size their services and potentially bring in new customers. Q: On fixed-wireless access, how might a LEO presence at the value end of the market alter your thought process around FWA's growth opportunity and its role as a bridge to fiber? A: Stankey said the most durable customer combination is fiber-fed broadband with great wireless on top, and that is the foundation of AT&T's goal to lead industry service revenue share. FWA will remain sustainable for certain customer bases and applications, but some uses will be outstripped by newer technologies, and he expects FWA could eventually peak and decline as better technologies settle in, consistent with AT&T's long-term guidance. Q: Can you talk about your goals for fiber penetration and what it would take for a new entrant to build a terrestrial footprint to complement a LEO mobile service? A: Stankey said AT&T's economics assume 40% terminal penetration but internal goals are higher, and he would not rule out wholesale over the long haul to use network capacity. On new entrants, he cautioned against over-rotating on one carrier of low-band spectrum, noting AT&T runs six to eight low-band carriers per metro and that 40%-45% of traffic originates indoors, so matching incumbent performance takes many years and huge investment. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

- Price change for AT&T stock: -6% - $T Stock Price as of Oct. 21: $22 - 52-Week High: $29 - $T Stock Price Target: $29 __Now Live: Discover how much upside your favorite stocks could have using TIKR's new Valuation Model (It's free)__>>> AT&T (T:NYSE) beat Wall Street estimates for the third quarter, but AT&T stock still fell more than 6% on Wednesday. - Adjusted earnings came in at $0.65 per share, ahead of the $0.60 analysts expected. - Revenue hit $32.32 billion against estimates of $31.65 billion. The company also raised its 2026 adjusted EPS outlook to about $2.40, above the $2.34 analysts expected. Management said most of the increase comes from lower depreciation tied to the planned sale of its Mexico wireless business. Customer growth was strong given AT&T added more than 1 million Advanced Connectivity customers for the second quarter in a row. That includes fiber, fixed wireless, and postpaid phone customers. Postpaid phone net adds were 379,000 and Advanced Connectivity revenue rose 6.1% to $23.9 billion. Cash returns stayed steady. AT&T returned $4.8 billion to shareholders, including $2.8 billion in buybacks. The annual dividend stays at $1.11 per share, while free cash flow was $5.0 billion. AT&T also kept its free cash flow targets and expects at least $18 billion in 2026, $19 billion in 2027 and $21 billion in 2028. Capital spending for 2026 is $23 billion to $24 billion, while for 2027 and 2028, it should be about $1 billion lower each year. See analysts' growth forecasts and price targets for AT&T stock (It's free) >>> The drop suggests investors found something to worry about beyond the beat. One concern is fiber pricing, as fiber revenue per customer fell 4% from last year, and AT&T expects a similar decline in Q4. The company says it is offering lower introductory prices to win more customers. AT&T expects higher marketing costs and about $100 million in vendor dispute settlements, which will weigh on adjusted EBITDA growth. The quarter also included two big charges. One was a $2.6 billion noncash impairment tied to the Mexico sale. The other was a roughly $800 million employee separation charge. Net debt to adjusted EBITDA rose to 3.13x after AT&T bought $23 billion of spectrum from EchoStar. The company wants to bring that back to about 2.5x during 2029. For now, AT&T stock is caught between solid growth and short-term cost pressure. This was also the last quarter for CFO Pascal Desroches. Jennifer Biry steps into the role after the new year. *__Estimate a company's fair value instantly (Free with TIKR) >>>__* TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR's valuation model and see what T stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It's free to use. Value AT&T for free→

Fresh off its third quarter report and updated 2026 guidance, AT&T (T) has become a live case study in how earnings quality, not just headline revenue, can shape investor reactions. That earnings update landed in a rough tape for AT&T. The share price fell about 6% in post earnings trading and is now at US$21.91. This feeds into a roughly 14% decline in the 1 month share price return and a weaker year to date share price performance. However, the 3 year and 5 year total shareholder returns of about 68% and 53% still reflect a very different longer term experience for investors. Spot fresh ideas by comparing AT&T's post earnings pullback with other telecom and infrastructure plays screened as 31 resilient stocks with low risk scores. With AT&T guiding to low single digit service revenue growth yet watching its share price retreat, the central question is whether the valuation still leaves meaningful upside or whether the recent long run has already done most of the work. On the most followed view, AT&T screens slightly expensive, with a Fair Value of $20.78 against the recent $21.91 close, so the debate shifts to whether its fiber heavy plan truly supports that premium. The main thing that has to go right is that AT&T converts its fiber-led convergence and copper retirement plans into higher value converged accounts and lower legacy costs, without Lumen-related integration issues or device subsidy constraints dragging on results for too long. Even though AI and cloud workloads are encouraging AT&T to re enter data center interconnect and metro connectivity with higher bandwidth offers, selective participation in lower margin dark fiber contracts and the upfront investment required for 400G plus infrastructure could compress returns on capital and weigh on Advanced Connectivity EBITDA. See why 8 investors see AT&T as 5% overvalued. Result: Fair Value of $20.78 (OVERVALUED) Still, if AT&T keeps lifting fiber driven Advanced Connectivity EBITDA and sustains lower churn with higher postpaid ARPU, that could chip away at this cautious thesis. Find out about the key risks to this AT&T narrative. The first narrative leans on a bearish fair value of $20.78, yet AT&T screens differently when you look at simple earnings math. At a P/E of 11.5x, the stock trades below the global telecom group at 15.2x and under a fair ratio of 18.9x. This points to a marked valuation gap that could either represent a margin of safety or a signal that the market still worries about debt, earnings quality, or both. For anyone weighing which lens to trust, it helps to see how this earnings based view is built out in more detail through See what the numbers say about this price — find out in our valuation breakdown.. If you are uncertain about AT&T after earnings or already leaning one way, move quickly from the headline reactions to your own perspective by weighing the 4 key rewards and 3 important warning signs. AT&T gives you useful signals, but your next strong result often comes from comparing it with fresh contenders across different styles and balance sheet profiles. - Target resilient all rounders by scanning a list of solid balance sheet and fundamentals (25 results) that can handle shocks without stretching their finances. - Hunt for potential mispricings by checking a focused list of 33 high quality undervalued stocks before the crowd pays attention to them. - Lock in cash flow themes by reviewing 7 dividend fortresses that aim to pair income potential with sturdier fundamentals. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include T. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

AT&T Inc. (NYSE:T) shares fell 3.3% in pre-market trading on Wednesday following the release of its third-quarter 2026 financial results, despite the telecommunications company reporting earnings and revenue above Wall Street expectations. The company also increased its full-year adjusted earnings guidance and maintained its free cash flow targets through 2028. The share price decline came as investors assessed the quarterly results alongside AT&T's updated financial outlook, capital investment plans and longer-term growth expectations. AT&T reported adjusted earnings per share of $0.65, exceeding the analyst consensus estimate of $0.60 by $0.05. Quarterly revenue reached $32.3 billion, compared with market expectations of $31.69 billion. The figure represented a 5.3% increase from the $30.7 billion recorded in the corresponding period of 2025. Adjusted EBITDA rose 5.4% to $12.5 billion, compared with $11.9 billion a year earlier. Free cash flow totalled $5.0 billion during the quarter, up from $4.9 billion in the prior-year period. The results reflected revenue growth and higher adjusted operating profitability as the company continued expanding its wireless and internet services. AT&T added more than 1 million Advanced Connectivity customers for the second consecutive quarter, supported by demand for its fibre broadband, fixed wireless and mobile services. The company reported 769,000 net internet customer additions, comprising 442,000 fibre connections and 327,000 fixed wireless customers. It also added 379,000 postpaid phone customers on a net basis during the quarter. Advanced Connectivity service revenue increased 6.1% year on year to $23.9 billion, while operating income in the segment rose 18.9% to $7.6 billion. The figures showed growth across AT&T's principal connectivity services, with both internet and wireless subscriptions contributing to the quarterly performance. John Stankey, AT&T's Chairman and Chief Executive Officer, commented on the company's customer acquisition performance and connectivity strategy. "We are growing valuable customer relationships as more homes and businesses choose AT&T for all their advanced connectivity needs across both internet and on-the-go wireless," Stankey said. The company continues to focus on expanding its fibre broadband infrastructure and wireless services as part of its strategy to increase customer relationships across multiple connectivity products. AT&T raised its adjusted earnings per share outlook for 2026 to $2.40, exceeding the analyst consensus estimate of $2.34. The updated forecast represents the midpoint of the company's guidance and is consistent with its projection for a double-digit compound annual growth rate in adjusted earnings per share over the three years through 2028. The company also reduced its longer-term capital investment outlook while maintaining its previously established free cash flow targets. AT&T continues to expect free cash flow of at least $18 billion in 2026, increasing to at least $19 billion in 2027 and $21 billion in 2028. For 2026, the company forecasts capital investment of between $23 billion and $24 billion. AT&T returned approximately $4.8 billion to shareholders during the third quarter, including $2.8 billion through share repurchases. The company also confirmed plans to maintain its annualised dividend of $1.11 per share. The capital returns were supported by quarterly free cash flow of $5.0 billion. AT&T's financial plans continue to combine investment in telecommunications infrastructure with dividends and share buybacks. Investors will be monitoring AT&T's ability to sustain customer additions across fibre, fixed wireless and mobile services while meeting its updated earnings and cash flow targets. The company's revised capital investment outlook and plans to increase adjusted earnings through 2028 will also remain relevant to assessments of its financial performance. Although third-quarter earnings and revenue exceeded expectations, AT&T's 3.3% pre-market share price decline indicated a negative initial market reaction to the announcement. AT&T stock price