AT&T reported better than expected Q1 results. Should I invest in May?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Apr 25, 2021
  • AT&T reported better than expected Q1 results last week
  • AT&T continues to grow its customer relationships with strong subscriber growth
  • Shares of this company show potential for patient investors

AT&T (NYSE: T) shares have advanced more than  9% since the beginning of January 2021, and the current share price stands around $31.40.  AT&T reported better than expected Q1 results last week, and according to the technical analysis, shares of this company remain in a buy zone.

Fundamental analysis: AT&T continues to grow its customer relationships with strong subscriber growth

AT&T reported Q1 2021 results last week; total revenue has increased by 2.6% Y/Y to $43.9B while Q1 GAAP EPS was $1.04 (beats by $0.49). Total revenue has increased above the expectations (+$1.21B), and the company consolidated revenue growth in the 1% range on a comparative basis for the 2021 fiscal year.

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AT&T continues to grow its customer relationships with strong subscriber growth in mobility, AT&T Fiber, and HBO Max while the first-quarter earnings results showed that this company is moving in the right direction.

“Our customer growth was impressive across mobility, fiber, and HBO Max, and we’re doing it the right way with a focus on growing profitability. In mobility, we added nearly 6,000 postpaid phones in the quarter, our best net add first quarter in more than ten years,” said John Stankey, Chief Executive Officer of AT&T.

This company’s fundamentals are not bad, and with the market capitalization of $224B, A&T is reasonably valued relative to the competition. AT&T’s debt is quite big, but this company generates more than enough cash to cover its debt and other obligations.

With the stability of a 6.6% dividend yield, AT&T has a very good risk/reward ratio currently, and shares of this company show potential for patient investors. The company’s EBITDA is above $50B, and AT&T has plenty of room to continue to offer dividend hikes.

Technical analysis: AT&T shares continue to trade in the buy zone after Q1 earnings results

AT&T shares continue to trade in the buy zone after Q1 earnings results, and for now, there is no risk of the bear market. AT&T continues to improve its position on the market, and if you are looking for high dividend income and good total return potential, shares of this company are not a bad choice.

Data source: tradingview.com

The current support levels are $30 and $28, $33 and $35, represent the important resistance levels. If the price jumps above $33, it would be a signal to buy AT&T shares, and the next target could be around $35.

Rising above $35 supports the continuation of the bullish trend for AT&T, but if the price falls below $30, it would be a strong “sell” signal.

Summary

AT&T reported Q1 2021 results last week; total revenue has increased 2.6% Y/Y, and the company continues to add subscribers. AT&T has raised its 2021 outlook, and according to estimates, the company expects about 1% consolidated revenue growth. Shares of this company show potential for patient investors, and with the stability of a 6.6% dividend yield, AT&T has a very good risk/reward ratio currently.

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