T-Mobile Q2 Results Top Estimates; Street Says Buy

Wireless network operator T-Mobile US, Inc. (TMUS) reported stronger-than-expected results for the second quarter. The company’s solid results were driven by the growth it witnessed in revenues.

Don't Miss Our Christmas Offers:

Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Following the news, shares of the company declined 2.5% to close at $141.03 in the extended trading session.

The company reported quarterly revenues of $20 billion, up 13% from the same quarter last year, and surpassed the Street’s estimate of $19.37 billion. The growth was primarily driven by an increase of 10% in service revenues at $14.5 billion.

T-Mobile’s earnings per share (EPS) of $0.78 denotes a significant jump from the prior year’s figure of $0.09. Also, it surpassed the consensus estimate of $0.53.

Further, core adjusted EBITDA witnessed a growth of 7% from the prior year to $6 billion.

Notably, the company has raised its guidance for 2021. The company expects postpaid net customer additions to be between 5 million and 5.3 million, up from the prior guidance of 4.4 million to 4.9 million. Further, the company anticipates core adjusted EBITDA to be in the range of $23-$23.3 billion, up from the earlier guidance of $22.8-$23.2 billion.

The CEO of T-Mobile, Mike Sievert, said, “Stellar postpaid customer gains and industry-leading service revenue growth translated into industry-best growth in profitability and cash flow, and drove another beat and raise quarter — all fueled by unprecedented synergies that only T-Mobile can deliver.” (See T-Mobile stock chart on TipRanks)

On July 22, RBC Capital analyst Kutgun Maral initiated a Hold rating on the stock with a price target of $133. The analyst’s price target implies downside potential of 8% from current levels.

Consensus among analysts is a Strong Buy based on 12 Buys and 3 Holds. The average T-Mobile price target of $158.50 implies upside potential of 9.6% from current levels. Shares of the company have gained 37.1% over the past year.