Will AT&T (T) Stock Be Helped By LG Smartwatch Sales?

NEW YORK (TheStreet) -- AT&T Inc.  (T) said it will be the first U.S. wireless carrier to sell LG Electronics' smartwatch, a wrist watch that connects to Android phones and answers voice commands, and goes on sale on July 11, Reuters reports.

The LG "G Watch," made in partnership with Google (GOOGL), will sell for $229 and be available for pre-orders on July 8.

Juniper Research estimates the value of the wearable device market this year at $1.5 billion, up from $800 million in 2013.

Must Read: Warren Buffett's 25 Favorite Growth Stocks

 

Shares of AT&T are down -1.36% to $35.53 in pre-market trade.

TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate AT&T INC (T) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • T's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues slightly increased by 3.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Net operating cash flow has slightly increased to $8,799.00 million or 7.31% when compared to the same quarter last year. In addition, AT&T INC has also modestly surpassed the industry average cash flow growth rate of 1.65%.
  • The debt-to-equity ratio is somewhat low, currently at 0.88, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.42 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: T Ratings Report

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