Despit rise in subscribers, AT&T's shares plummet. Could this be the right moment to snap up at a discount?
In the second quarter of 2025, both AT&T and Verizon reported their earnings, showcasing their respective strengths and weaknesses.
AT&T demonstrated solid wireless subscriber gains, adding 401,000 retail postpaid phone subscribers. The company's mobility-segment revenue increased 6.7% to $21.8 billion, while equipment sales surged 18.8% to $5 billion. Moreover, the broadband ARPU climbed by 7.5% to $71.16, and fiber ARPU rose by 6.2% to $73.26.
In contrast, Verizon reported a 5.2% year-over-year increase in Q2 revenue, reaching $34.5 billion, with adjusted EPS up 6.1% to $1.22. Verizon had a 2.2% rise in wireless service revenue to $20.9 billion, indicating healthy customer demand.
AT&T's guidance for mobility service revenue growth has been revised to 3% or better, signalling continued growth in the wireless sector. However, the company lost 34,000 prepaid subscribers in the second quarter, highlighting challenges in this area.
In terms of valuation, Verizon's forward P/E is 9, lower than AT&T's 13.5. Verizon's stock shows a free cash flow yield near 8% with upward guidance, suggesting its attractiveness. AT&T, on the other hand, has a strong buy consensus with upside potential, reflecting optimism due to wireless strength and improving cash flow estimates.
Strategic moves were also a key factor in the comparison. Verizon secured a $20 billion Frontier Communications acquisition, while AT&T acquired Lumen’s 11-state mass market fiber assets for $5.75 billion. AT&T also invests $3.5 billion annually in fiber expansion, signalling a long-term fiber strategy despite near-term fiber subscriber softness.
After Q2 2025 earnings, Verizon offers better value based on stronger revenue growth, higher net income, and raised guidance. AT&T, however, shows solid wireless subscriber gains but faces headwinds in fiber and business segments.
Investors prioritizing steady cash flow and financial performance may favor Verizon, while those betting on AT&T’s network transition and subscriber growth might see longer-term upside with higher risk.
[1] CNBC (2025). Verizon Q2 earnings: Here's what to expect. [online] Available at: https://www.cnbc.com/2025/07/20/verizon-q2-earnings-2025.html
[2] Barron's (2025). AT&T Earnings: What to Expect When the Telecom Giant Reports Q2 Results. [online] Available at: https://www.barrons.com/articles/att-earnings-q2-results-stock-51564160223
[3] Yahoo Finance (2025). AT&T Reports Q2 Earnings. [online] Available at: https://finance.yahoo.com/news/att-reports-q2-earnings-220000109.html
[4] MarketWatch (2025). AT&T stock surges after earnings, as wireless business continues to grow. [online] Available at: https://www.marketwatch.com/story/att-stock-surges-after-earnings-as-wireless-business-continues-to-grow-2025-07-21
[5] Seeking Alpha (2025). Verizon Q2 2025 Earnings Preview. [online] Available at: https://seekingalpha.com/article/4456493-verizon-q2-2025-earnings-preview
- In light of their Q2 2025 earnings, finances indicate a stronger revenue growth and net income for Verizon, making it a potentially more attractive investment for those prioritizing steady cash flow and financial performance.
- AT&T's Q2 earnings report shows solid wireless subscriber gains, with an increase in mobility-segment revenue and equipment sales, but also highlights challenges in the fiber and business segments, which might present a higher risk for investors.
- The technology sector, specifically companies like Verizon and AT&T, continues to be a hotspot for investment, with strategic moves such as acquisitions and long-term fiber strategies playing significant roles in shaping the financial landscape of these businesses.
