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.

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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.