Insider Decision: Jeffery McElfresh Offloads $4.16M Worth Of AT&T Stock

Jeffery McElfresh, Chief Operating Officer at AT&T T, reported an insider sell on February 27, according to a new SEC filing.

What Happened: McElfresh's decision to sell 173,156 shares of AT&T was revealed in a Form 4 filing with the U.S. Securities and Exchange Commission on Thursday. The total value of the sale is $4,159,211.

Monitoring the market, AT&T's shares up by 0.45% at $27.02 during Friday's morning.

Delving into AT&T's Background

The wireless business contributes nearly 70% of AT&T's revenue. The firm is the third-largest US wireless carrier, connecting 72 million postpaid and 17 million prepaid phone customers. Fixed-line enterprise services, which account for about 15% of revenue, include internet access, private networking, security, voice, and wholesale network capacity. Residential fixed-line services, about 11% of revenue, primarily consist of broadband internet access, serving 14 million customers. AT&T also has a sizable presence in Mexico, with 23 million customers, but this business only accounts for 4% of revenue. The firm recently agreed to sell its 70% equity stake in satellite television provider DirecTV to its partner, private equity firm TPG.

A Deep Dive into AT&T's Financials

Revenue Growth: AT&T's revenue growth over a period of 3 months has been noteworthy. As of 31 December, 2024, the company achieved a revenue growth rate of approximately 0.86%. This indicates a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Communication Services sector.

Insights into Profitability:

• Gross Margin: The company faces challenges with a low gross margin of 56.05%, suggesting potential difficulties in cost control and profitability compared to its peers.

• Earnings per Share (EPS): AT&T's EPS reflects a decline, falling below the industry average with a current EPS of 0.56.

Debt Management: AT&T's debt-to-equity ratio is notably higher than the industry average. With a ratio of 1.35, the company relies more heavily on borrowed funds, indicating a higher level of financial risk.

Financial Valuation Breakdown:

• Price to Earnings (P/E) Ratio: AT&T's current Price to Earnings (P/E) ratio of 18.05 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.

• Price to Sales (P/S) Ratio: The current P/S ratio of 1.58 is below industry norms, suggesting potential undervaluation and presenting an investment opportunity for those considering sales performance.

• EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): With an impressive EV/EBITDA ratio of 7.51, AT&T demonstrates exemplary market valuation, surpassing industry averages.

Market Capitalization Highlights: Above the industry average, the company's market capitalization signifies a significant scale, indicating strong confidence and market prominence.

Now trade stocks online commission free with Charles Schwab, a trusted and complete investment firm.

Understanding the Significance of Insider Transactions

Considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.

When discussing legal matters, the term "insider" refers to any officer, director, or beneficial owner holding more than ten percent of a company's equity securities, as stipulated in Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and significant hedge funds. Such insiders are required to report their transactions through a Form 4 filing, which must be completed within two business days of the transaction.

A new purchase by a company insider is a indication that they anticipate the stock will rise.

On the other hand, insider sells may not necessarily indicate a bearish view and can be motivated by various factors.

A Closer Look at Important Transaction Codes

When it comes to transactions, investors tend to focus on those in the open market, detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S indicates a sale. Transaction code C signals the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.

Check Out The Full List Of AT&T's Insider Trades.

Insider Buying Alert: Profit from C-Suite Moves

Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. Click here for access.

This article was generated by Benzinga's automated content engine and reviewed by an editor.