Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTSheryar SiddiqSat, July 25, 2026 at 1:00 PM GMT+2 3 min readAT&T Inc. (NYSE:T) appears to have given telecom bears reason to pause after its second-quarter report. Although top-line consolidated revenue of $31.6 billion came in slightly lower than expected, operational efficiency and underlying cash generation were prominent metrics to note. The company reported adjusted earnings per share of $0.65, exceeding expectations of $0.59, thanks to strong subscriber growth and increased operating leverage across its fiber and 5G networks.Free Cash Flow Silences BearsThis operational performance directly addresses the primary bearish thesis that has plagued legacy telecom for several quarters: the fear that massive 5G and fiber buildouts will deplete cash flow and jeopardize shareholder returns. AT&T's second-quarter results squarely contradict that storyline. During the quarter, free cash flow totaled $4.7 billion, a 6.3% rise from the previous year and comfortably exceeding management's internal guidance range of $4.0 billion to $4.5 billion.Beyond cash flow, evaluating telecom-focused operational measures rather than baseline EPS reveals even more about AT&T's underlying quality of earnings. The company's adjusted EBITDA climbed by 5.2% year-over-year to $12.3 billion, crossing revenue growth and showcasing solid development. This operational momentum boosted the company's adjusted EBITDA margin by 110 basis points, to 39.1%.The subscriber mix was the most essential detail. AT&T Inc. (NYSE:T) added 432,000 postpaid phone users in the quarter, greatly exceeding the 338,500 analysts expected, and it acquired more than 1 million advanced connectivity subscribers overall, aided by fiber and fixed wireless growth.Valuation Disconnect: Forward EV/EBITDA Signals MispricingDespite this strong operational execution, AT&T's stock remains detached from its fundamental performance. The stock currently trades at around 6.7x projected EV/EBITDA, which represents a significant discount to Verizon at 7.3x and T-Mobile at 8.8x. Moreover, this metric ranks below AT&T's own five-year historical average of 7.5x to 8x, indicating a tempting valuation gap for a company that strongly competes with its peer group in fiber growth footprint and customer integration.De-risking CompetitionThis compelling valuation was further supported by the fact that emerging competition concerns have been significantly overblown. Headlines about SpaceX exploring land-based cellular networks via Starlink have piqued the market's interest, although satellite-to-cell technologies serve mostly as a complementary patch for remote regions rather than a direct threat to high-density terrestrial infrastructure.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info