AT&T's stock is having its worst year since the 2008 financial crisis, down more than 20 percent year to date, as the company's multi-billion-dollar bets struggle to take off and its wireless business faces growth challenges.
The company expanded its media distribution business in 2014 with a $50 billion purchase of satellite distributor DirecTV. AT&T doubled down on the media space earlier this year with its $85.4 billion acquisition of Time Warner.
But now, AT&T is facing $250 billion in debt and a crowded media space, with a growing number of competitor streaming services hitting the market. It is also grappling with cord cutting as people drop their satellite TV packages for cheaper options.
Moreover, it's not clear AT&T's strategy of buying media and satellite assets to boost its wireless business by allowing it to bundle more products together will pay off in the long run. Revenue in its legacy satellite and wireless businesses has grown modestly at best, sometimes even posting year-over-year declines.
AT&T is trading into correction territory on the year, but Verizon is up almost 10 percent in the same period. Practically every major Wall Street analyst has a sell or hold rating on the stock, including MoffettNathanson.
"There were a lot of people who thought AT&T was the visionary and that they were making visionary bets on the media ecosystem at a time when Verizon was caught in quicksand," Craig Moffett, an analyst at MoffettNathanson, said. "Two years later, Verizon looks to have been the far more prudent of the two."
AT&T earlier this week reported a large drop in DirecTV video subscribers for the September quarter. The division shed 359,000 customers, while its direct-to-consumer streaming play DirecTV Now added just 49,000 subscribers to compensate.
"In retrospect, they diversified away from wireless right at the bottom and diversified into satellite TV right at the top," Moffett told CNBC. "As far as timing, it could hardly have been worse."
He added, "The DirecTV business is the biggest anchor, but the company's strategy isn't helping."