Is AT&T, Inc. overvalued or undervalued?

As of 7 April 2025, the valuation grade for AT&T, Inc. has moved from very attractive to very expensive, indicating a significant shift in its market perception. The company is currently deemed overvalued based on its financial metrics. Key ratios include a P/E ratio of 15, an EV to EBITDA of 7.39, and a Price to Book Value of 2.08, which are higher than some of its peers. For instance, T-Mobile US, Inc. has a P/E of 20.94 and an EV to EBITDA of 10.60, while Verizon Communications, Inc. shows a more favorable P/E of 9.40 and an EV to EBITDA of 6.48, suggesting that AT&T's valuation is not justified relative to its competitors.
Additionally, AT&T's recent stock performance has outpaced the S&P 500, with a year-to-date return of 23.85% compared to the S&P 500's 2.44%. However, despite this strong performance, the current valuation metrics indicate that AT&T is overvalued in the context of its industry and peer comparisons.