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T-Mobile US Inc TMUS

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Stock XNAS Rating as of
$178.43 +0.33 (0.19%)
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As of Delayed Price Closed

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T-Mobile Is the Strongest of the US Wireless Carriers, but It Still Faces Powerful Rivals

Michael Hodel

T-Mobile’s brand and reputation, coupled with a strong network and spectrum position, should drive strong market share gains over the next couple of years. In the longer term, however, we expect AT&T and Verizon to be able to match T-Mobile, and that market share will stabilize among the three carriers. While competition is currently elevated, a rational competitive landscape should emerge, allowing for stable pricing, disciplined investment, and expanding cash flow.

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Price vs Fair Value

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TMUS is trading at a 696% premium.
Price
$178.43
Fair Value
$353.00
Uncertainty
Medium
1-Star Price
$118.00
5-Star Price
$814.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

After several years of unprecedented success, T-Mobile’s reputation with consumers is as strong as ever. In an increasingly rational competitive environment, the firm will continue growing market share while increasing revenue per customer.

Bears

T-Mobile will eventually need to step up network investments to keep pace with AT&T and Verizon, which have dense fixed-line networks at their disposal. A costly acquisition could be necessary.

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Trading Information

Previous Close Price
$178.10
Day Range
$177.06–180.71
52-Week Range
$174.02–261.56
Bid/Ask
$177.79 / $179.30
Shares Outstanding
1.08B
Market Cap
$193.10B
Volume/Avg
5M / 6M

Key Statistics

Price/Earnings (Normalized)
16.66
Price/Sales
2.21
Dividend Yield (Trailing)
2.21%
Dividend Yield (Forward)
2.29%
Total Yield
8.58%

Company Profile

Deutsche Telekom merged its T-Mobile USA unit with prepaid specialist MetroPCS in 2013, and that firm merged with Sprint in 2020, creating the second-largest wireless carrier in the US. T-Mobile now serves about 86 million postpaid and 26 million prepaid phone customers, equal to around 30% of the US retail wireless market. The firm entered the fixed-wireless broadband market aggressively in 2021 and now serves 8 million residential and business customers with its wireless network. It also serves 1 million fiber broadband customers through joint ventures with fiber network owners. T-Mobile owns a stake in these firms, which provide wholesale access to their networks. In addition, T-Mobile provides wholesale services to wireless resellers.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
75,000
Website
https://www.t-mobile.com

Competitors

Valuation

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Metric
TMUS
CMCSA
VZ
Price/Earnings (Normalized)
 16.665.949.47
Price/Book Value
 3.470.961.85
Price/Sales
 2.210.701.38
Price/Cash Flow
 6.542.804.79
Price/Earnings
TMUS
CMCSA
VZ

Financial Strength

Metric
TMUS
CMCSA
VZ
Quick Ratio
 0.650.710.50
Current Ratio
 1.090.870.64
Interest Coverage
 4.546.394.22
Quick Ratio
TMUS
CMCSA
VZ

Profitability

Metric
TMUS
CMCSA
VZ
Return on Assets (Normalized)
 5.83%5.46%4.43%
Return on Equity (Normalized)
 21.12%15.78%17.04%
Return on Invested Capital (Normalized)
 8.64%9.42%8.01%
Return on Assets
TMUS
CMCSA
VZ

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