Is AT&T Stock a Buy Now?

Venerable telecom titan AT&T (NYSE: T) is on a roll. Its shares soared to a 52-week high of $29.03 in April, the highest it's been since before the COVID-19 pandemic.This result is a dramatic turnaround from the 52-week low of $16.73 reached a year ago. Does this mean now is the time to scoop up the stock?

AT&T shares remain stubbornly near their high at the time of writing. So it's worth taking a deeper look into the company to assess whether now is the time to invest in the stock for the long haul.

Image source: Getty Images.

AT&T's sales success

The impressive rise in AT&T stock is due to its business performance. The firm finished 2024 with a 3.5% year-over-year increase in its mobile service revenue. This part of its business is key since it contributed $65.4 billion of the telecom's $122.3 billion in 2024 sales.

Mobile service income continued increasing in 2025 with $16.7 billion in the first quarter, representing 4% year-over-year growth. The company expects 2025 mobile service revenue to rise by at least 2% to 3% and to grow annually in that range through 2027.

AT&T's sales expansion was the result of its success in acquiring customers. In Q1, the firm added 324,000 postpaid phone subscribers, the telecom industry's most valuable clientele. This represented the 19th consecutive quarter of postpaid phone net additions.

Another factor galvanizing sales growth is AT&T's convergence strategy, where customers adopt both the telecom's mobile service and fiber optic internet offerings. In Q1, over 40% of fiber subscribers also purchased mobile services.The convergence effect is helping AT&T's fiber business to grow rapidly, as Q1 fiber sales rose 19% year over year to $2.1 billion.

AT&T's strong free cash flow growth

While rising sales is important, so is AT&T's ability to produce consistent free cash flow (FCF). FCF indicates the cash available for the firm to invest in its business, pay down debt, repurchase shares, and fund its dividend, which yields a robust 4% at the time of writing. AT&T's Q1 free cash flow increased to $3.1 billion from $2.8 billion in 2024. The company anticipates full-year FCF to reach at least $16 billion in 2025 with ongoing FCF growth of $1 billion annually through 2027.

Since the company holds substantial debt, $126.2 billion at the end of Q1, FCF is essential to reducing this burden. In fact, AT&T hit its goal of a net debt-to-adjusted EBITDA ratio in the 2.5x range in Q1. With debt at a more manageable level, the conglomerate will begin share repurchases in Q2.

Is now the time to buy AT&T stock?

With AT&T's excellent Q1, and the company's expectations for mobile service and FCF growth over the next couple of years, the telecom looks like a worthwhile long-term investment. But given its elevated share price, is now the time to grab shares?

The forward price-to-earnings (P/E) ratio can provide insight here. This metric is a common gauge for stock valuation. It tells you how much investors are willing to pay for a dollar's worth of earnings based on estimates for the next 12 months.

Data by YCharts.

A year ago, AT&T's forward P/E multiple was the lowest among its top competitors, Verizon Communications and T-Mobile, but since then, it has steadily increased as its stock price took off. Although it still looks like a good value compared to T-Mobile, AT&T shares are now pricier than Verizon.

That said, arguably AT&T is worth a higher valuation because its customer growth looks like it's coming at the expense of its rival. Verizon suffered a net loss of 289,000 postpaid phone subscribers in Q1, while AT&T gained 324,000. This suggests AT&T snatched some postpaid subscribers from its competitor.

Add to this the resilience of telecom companies amid the stock market volatility caused by President Donald Trump's tariff policies. That's because mobile phones are a necessity in today's connected society, providing a steady stream of sales to AT&T.

Digging into AT&T's performance reveals a lot to like. It's successfully growing customers, sales, and free cash flow. It's beginning stock buybacks, which benefits shareholders by reducing the number of available shares. Add to these factors a reasonable valuation, and now looks like a good time to buy shares in AT&T.

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Robert Izquierdo has positions in AT&T, T-Mobile US, and Verizon Communications. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.