AT&T(T) The Motley Fool·2025-03-27 11:15Core Viewpoint - The uncertainty surrounding the U.S. economy has negatively impacted the stock market, but telecom stocks, particularly AT&T and T-Mobile, are seen as stable investment opportunities due to society's reliance on mobile devices [1] Group 1: AT&T Performance - AT&T shares have recently surged, reaching a 52-week high of 27.97, attributed to improved business performance after a challenging transition from its entertainment division [2] - Mobile service sales for AT&T grew by 3.5% year over year to 65.4 billion in 2024, contributing significantly to the total revenue of 122.3 billion [3] - AT&T forecasts continued growth in mobile service revenue of at least 2% in 2025, with management projecting annual free cash flow (FCF) growth of 1 billion through 2027 [4] Group 2: T-Mobile Performance - T-Mobile shares also reached a 52-week high of 81.4 billion [5] - T-Mobile's adjusted free cash flow rose by 25% year over year to $17 billion in 2024, with expectations to maintain this level in 2025 [6] - The company ended 2024 with a record 129.5 million total customers, with over 60% of new customers opting for premium plans, boosting average revenue per account [7] Group 3: Investment Considerations - When comparing AT&T and T-Mobile, stock valuation is a key factor, with T-Mobile historically having a higher forward price-to-earnings (P/E) ratio, indicating a better value for AT&T shares [8][9] - T-Mobile's diluted earnings per share (EPS) has consistently outperformed AT&T's, which has been inconsistent due to its transition [10][11] - Investors face a choice between AT&T's potential for growth and T-Mobile's established success, with conservative investors likely favoring T-Mobile and those with higher risk tolerance considering AT&T's attractive valuation [12]