AT&T (T) Expands Smart Meter Alliance, Is The 25% Undervaluation Case Convincing?

Why AT&T’s Smart Meter alliance matters for investors

AT&T (T) is expanding its collaboration with Smart Meter, putting its Global SIM Advanced technology at the center of remote patient monitoring connectivity for hospitals, clinics and device makers across the United States.

The Smart Meter announcement lands after a choppy stretch for AT&T’s equity, with a 1-month share price return down 11.89% and the year-to-date move lower by 12.83%. However, a 3-year total shareholder return of 56.68% and 5-year total shareholder return of 49.50% signal that longer term holders have still seen meaningful value creation even as recent momentum has faded.

Scan other telecoms quietly pushing into connected healthcare by reviewing the hand picked list of solid balance sheet and fundamentals (24 results) as a starting universe alongside AT&T’s Smart Meter move.

AT&T shares have slid even as analyst targets and some intrinsic value estimates sit materially higher than the current US$21.41 price. The key question is whether that discount is still justified once the valuation work starts.

Most Popular Narrative: 24.8% Undervalued

Against AT&T’s last close at $21.41, the most followed narrative anchors fair value at $28.46. This frames the recent Smart Meter news inside a wider fiber heavy investment story and a discounted cash flow outlook using a 7.66% hurdle rate.

Accelerated investments in 5G and fiber infrastructure, now supported by a multi year fiber supply agreement worth over US$3b and part of more than US$250b of planned U.S. network spending over the next five years, continue to expand AT&T''s reach and are aimed at supporting recurring service revenue growth and future earnings power.

See why 279 investors see AT&T as 25% undervalued.

Result: Fair Value of $28.46 (UNDERVALUED)

Still, the AT&T story can change quickly if cost savings from retiring copper networks slip, or if rich device subsidies weigh more heavily on cash generation.

Find out about the key risks to this AT&T narrative.

Next Steps

Mixed signals from AT&T’s story so far, with clear concerns and real bright spots, mean the next move is on you. Weigh those trade offs yourself by reviewing the 4 key rewards and 3 important warning signs.

Looking for more AT&T style investment ideas?

If you stop with AT&T, you risk missing other opportunities that fit your goals. Take a few minutes to scan a broader set of ideas.

• Target resilient compounding potential by reviewing 33 high quality undervalued stocks that pair quality fundamentals with prices that sit below many investors’ fair value estimates.
• Build a steadier income stream by focusing on 5 dividend fortresses that combine higher yields with balance sheets built to handle pressure.
• Protect the downside first by filtering for 29 resilient stocks with low risk scores that score well on financial strength and business stability.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com