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T-Mobile US Inc TMUS

Morningstar Rating
$162.86 −0.95 (0.58%)
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Company Report

T-Mobile Earnings: A Stable Competitive Environment Continues to Enable Strong Customer Growth

T-Mobile continues to lead the U.S. wireless industry in customer additions while growth in revenue per customer lags AT&T and Verizon. Management didn’t directly respond when asked about potential phone plan price increases in 2024. Instead, it highlighted the “unprecedented value” customers now receive while hinting at “optimization” opportunities, like the changes in its autopay discount policy implemented in 2023. The firm increased the price of its fixed-wireless broadband offering last week, which it expects will modestly slow customer additions to the service in 2024. Management’s forecast for 2024 also calls for phone customer growth similar to 2023. Even with these limitations, T-Mobile expects accelerating wireless service revenue growth. We still expect the firm to grow increasingly comfortable in taking steps to increase revenue per customer as competition in the wireless industry remains rational. We are leaving our T-Mobile fair value estimate at $165 per share.

Price vs Fair Value

TMUS is trading at a 6% discount.
Price
$163.80
Fair Value
$184.00
Uncertainty
Medium
1-Star Price
$551.41
5-Star Price
$462.80
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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News

Trading Information

Previous Close Price
$163.81
Day Range
$162.76164.30
52-Week Range
$124.94165.99
Bid/Ask
$162.81 / $162.90
Market Cap
$193.23 Bil
Volume/Avg
397,727 / 4.3 Mil

Key Statistics

Price/Earnings (Normalized)
20.45
Price/Sales
2.50
Dividend Yield (Trailing)
0.40%
Dividend Yield (Forward)
0.40%
Total Yield
7.12%

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 U.S. T-Mobile now serves 76 million postpaid and 22 million prepaid phone customers, equal to around 30% of the U.S. retail wireless market. The firm entered the fixed-wireless broadband market aggressively in 2021 and now serves nearly 5 million residential and business customers. In addition, T-Mobile provides wholesale services to resellers.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Core
Total Number of Employees
67,000

Competitors

Valuation

Metric
TMUS
CMCSA
T
Price/Earnings (Normalized)
20.4510.627.04
Price/Book Value
3.032.031.17
Price/Sales
2.501.441.01
Price/Cash Flow
7.676.363.02
Price/Earnings
TMUS
CMCSA
T

Financial Strength

Metric
TMUS
CMCSA
T
Quick Ratio
0.680.500.33
Current Ratio
0.910.600.71
Interest Coverage
4.306.013.96
Quick Ratio
TMUS
CMCSA
T

Profitability

Metric
TMUS
CMCSA
T
Return on Assets (Normalized)
4.58%6.32%4.17%
Return on Equity (Normalized)
14.49%19.98%16.72%
Return on Invested Capital (Normalized)
6.73%10.60%8.19%
Return on Assets
TMUS
CMCSA
T
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