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T Mobile US (TMUS)
NASDAQ:TMUS
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T Mobile US
(NASDAQ:TMUS)76Outperform
Positive Factors
Market Share
T-Mobile is gaining share in urban markets, affirmed by network leadership from OpenSignal and Ookla.
Subscriber Growth
T-Mobile's postpaid phone gain of 903K was its highest ever quarterly gain, representing significant growth among major U.S. MNOs.
Negative Factors
Margins
Subscriber acquisition costs could elevate in the first half, resulting in some pressure on margins.
T Mobile US (TMUS) vs. S&P 500 (SPY)
Market Cap
$302.16B
Dividend Yield1.12%
Average Volume (3M)3.95M
Price to Earnings (P/E)27.4
Beta (1Y)0.44
Revenue Growth3.62%
EPS Growth38.24%
CountryUS
Employees70,000
SectorCommunication Services
Sector Strength85
IndustryTelecommunications
Share Statistics
EPS (TTM)9.68
Shares Outstanding1,141,745,000
10 Day Avg. Volume3,926,765
30 Day Avg. Volume3,949,849
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)N/A
Price to Sales (P/S)3.83
Price to Cash Flow (P/CF)14.00
P/FCF Ratio11.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$264.53Price Target Upside0.68% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering21
T Mobile US Business Overview & Revenue Model
Company DescriptionFounded in 1994, T-Mobile US, Inc., a wireless network operator, provides wireless communications services for branded postpaid and prepaid, and wholesale customers under the T-Mobile and MetroPCS brands. The company is headquartered in Bellevue, Washington.
How the Company Makes MoneyT-Mobile US generates revenue primarily through the provision of wireless communications services to consumers and businesses. Its key revenue streams include postpaid and prepaid wireless service plans, which offer a variety of voice, messaging, and data options. The company also earns money from the sale of mobile devices, accessories, and equipment. Additionally, T-Mobile benefits from wholesale services and roaming agreements with other telecommunications providers. Significant factors contributing to its earnings include strategic partnerships, such as its merger with Sprint Corporation, which expanded its customer base and network capabilities, and its investment in 5G technology, enhancing service offerings and attracting new customers.
T Mobile US Financial Statement Overview
Summary
T-Mobile US showcases robust financial health with strong revenue growth and profitability metrics. Efficient operations and cash flows are evident, although a high reliance on debt is noted, a common trait in the telecommunications sector.Income Statement
T-Mobile US demonstrated strong financial performance with significant revenue growth over previous years, achieving a 3.6% growth in 2024. The company maintains healthy margins with a gross profit margin of 100% and a net profit margin of 13.9% for 2024, indicating efficient cost management. The EBIT margin stands at 22.1%, and the EBITDA margin is 21.5%, reflecting robust operational efficiency.85
Very Positive
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 1.76, which is typical for the telecommunications industry and indicates a balanced use of debt and equity. The return on equity is impressive at 18.4%, signifying strong shareholder returns. However, a lower equity ratio of 29.7% suggests a higher reliance on liabilities, which poses potential risk if financial markets fluctuate.75
Positive
Cash Flow
T-Mobile US has shown an impressive free cash flow growth rate of 73.6% over the past year, indicating effective cash management and capacity for reinvestment or debt reduction. The operating cash flow to net income ratio of 1.97 suggests that the company's operational activities are generating sufficient cash relative to its net income. With a free cash flow to net income ratio of 1.19, the company demonstrates strong cash conversion efficiency.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 81.40B | 78.56B | 79.57B | 80.12B | 68.40B | Gross Profit |
| 81.40B | 45.89B | 43.37B | 43.51B | 40.13B | EBIT |
| 18.01B | 14.27B | 6.54B | 6.89B | 6.64B | EBITDA |
| 31.04B | 26.93B | 27.13B | 26.38B | 23.58B | Net Income Common Stockholders |
| 11.34B | 8.32B | 2.59B | 3.02B | 3.06B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.41B | 5.13B | 4.51B | 6.63B | 10.38B | Total Assets |
| 208.03B | 207.68B | 211.34B | 206.56B | 200.16B | Total Debt |
| 108.78B | 113.09B | 107.86B | 106.01B | 104.22B | Net Debt |
| 103.37B | 107.95B | 103.35B | 99.38B | 93.83B | Total Liabilities |
| 146.29B | 142.97B | 141.68B | 137.46B | 134.82B | Stockholders Equity |
| 61.74B | 64.72B | 69.66B | 69.10B | 65.34B |
| Cash Flow | Free Cash Flow | |||
| 9.98B | 7.75B | -520.00M | -7.78B | -3.73B | Operating Cash Flow |
| 22.29B | 18.56B | 16.78B | 13.92B | 8.64B | Investing Cash Flow |
| -9.07B | -5.83B | -12.36B | -19.39B | -12.71B | Financing Cash Flow |
| -12.81B | -12.10B | -6.45B | 1.71B | 13.01B |
T Mobile US Technical Analysis
Positive
262.74
Price Trends
236.59
Positive
232.96
Positive
209.11
Positive
Market Momentum
8.67
Positive
58.42
Neutral
41.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMUS, the sentiment is Positive. The current price of 262.74 is above the 20-day moving average (MA) of 261.06, above the 50-day MA of 236.59, and above the 200-day MA of 209.11, indicating a bullish trend. The MACD of 8.67 indicates Positive momentum. The RSI at 58.42 is Neutral, neither overbought nor oversold. The STOCH value of 41.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TMUS.
T Mobile US Risk Analysis
T Mobile US disclosed 26 risk factors in its most recent earnings report. T Mobile US reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
T Mobile US Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $302.16B | 27.38 | 18.37% | 1.12% | 3.62% | 38.24% | |
76 Outperform | $188.21B | 17.58 | 9.26% | 4.00% | -0.08% | -24.48% | |
73 Outperform | $181.44B | 10.40 | -224.44% | 6.26% | 0.61% | 50.39% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
48 Neutral | $4.88B | ― | -11.85% | ― | -9.95% | 99.47% | |
41 Neutral | $610.15M | ― | -4.05% | 0.90% | 14.16% | -443.30% | |
35 Underperform | $56.01M | ― | -160.12% | ― | -11.65% | -1042.58% |
* Communication Services Sector Average
Performance Comparison
TMUS
T Mobile US
262.74
97.65
59.15%
T
AT&T
26.18
9.94
61.21%
LUMN
Lumen Technologies
5.16
3.45
201.75%
CMTL
Comtech Telecommunications
1.84
-4.31
-70.08%
SHEN
Shenandoah Telecommunications Co
11.37
-7.29
-39.07%
VZ
Verizon
42.84
5.44
14.55%
T Mobile US Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: 19.21% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
T-Mobile's earnings call highlighted significant achievements in customer growth, 5G leadership, and financial performance, with increased guidance for 2024. However, the company also faced challenges with wholesale revenue decline and additional costs from hurricanes.Highlights
Record Postpaid Phone Net Adds
T-Mobile delivered the best Q3 postpaid phone net adds in a decade, fueled by record low Q3 postpaid phone churn and continued year-over-year growth in gross adds.
Broadband Growth Milestone
T-Mobile reached a major milestone of 6 million broadband customers in just 3 years, halfway to the long-term target of 12 million customers by 2028.
5G Network Leadership
T-Mobile's 5G network was awarded as having the best 5G availability in the world by OpenSignal, with advancements in technologies like voice over new radio and carrier aggregation.
Financial Performance and Guidance Increase
T-Mobile raised its 2024 guidance, expecting total postpaid customer net additions between 5.6 million and 5.8 million and core adjusted EBITDA between $31.6 billion and $31.8 billion.
ARPA Growth
T-Mobile expects full-year postpaid ARPA to be up around 3% year-over-year, with continued industry-leading service revenue growth.
Lowlights
Wholesale Revenue Decline
Continued decline in wholesale revenue due to factors like ACP and TracFone transition, with ACP decline expected towards the higher end of $350-$450 million.
Hurricane Costs
Hurricanes Helene and Milton led to additional costs in Q4 for network recovery and customer support.
Spectrum Challenges
Challenges in the spectrum market, including 3.45 GHz not fitting the network plan and ongoing regulatory processes for new spectrum utilization.
Company Guidance
During T-Mobile's Q3 2024 earnings call, the company announced an upward revision of its 2024 guidance, reflecting strong performance across various metrics. T-Mobile now anticipates total postpaid customer net additions between 5.6 million and 5.8 million, with the postpaid phone customer net additions expected to reach approximately 3 million. The company also projects a 3% year-over-year increase in full-year postpaid ARPA, with core adjusted EBITDA estimated between $31.6 billion and $31.8 billion, representing a $50 million increase at the midpoint. Cash CapEx remains steady, projected between $8.8 billion and $9 billion, while adjusted free cash flow is forecasted to be in the range of $16.7 billion to $17 billion, driven by margin expansion and capital efficiency. This guidance underscores T-Mobile's focus on delivering consistent, profitable growth, leveraging its best-in-class network, value propositions, and enhanced customer experiences.T Mobile US Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
T-Mobile US Appoints New COO for Growth
Positive
Jan 27, 2025
T-Mobile US has appointed Srinivasan Gopalan as the new Chief Operating Officer, effective March 1, 2025. Gopalan, with extensive experience in technology and telecommunications, will focus on enhancing T-Mobile’s customer experience and advancing technology initiatives, particularly in 5G, to support the company’s growth strategy. His leadership is expected to bolster T-Mobile’s market position and drive its transformation into a digital-first company.
Stock BuybackDividendsBusiness Operations and Strategy
T-Mobile US Launches $14 Billion Shareholder Return Program
Positive
Dec 13, 2024
T-Mobile US announced a new shareholder return program valued at up to $14 billion, which includes share repurchases and cash dividends, running through the end of 2025. This program is part of a broader capital allocation strategy that anticipates $80 billion in investments and capital returns by 2027. T-Mobile’s strategy reflects a balanced approach to capital management, considering pending transactions and market conditions, with the flexibility to adjust allocations as needed.
Business Operations and StrategyFinancial Disclosures
T-Mobile US Projects Strong Growth and Expansion
Positive
Dec 10, 2024
T-Mobile’s CEO Mike Sievert recently expressed strong confidence in the company’s growth trajectory at the UBS Global Media and Communications Conference. He emphasized robust Q4 trends and reiterated expectations for 3 million postpaid phone net additions, highlighting opportunities in under-penetrated areas like enterprise and government sectors. Sievert showcased T-Mobile’s strategic focus on customer experience enhancements through digital transformation and premium plan offerings, projecting substantial growth in service revenue and free cash flow through 2027.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.