Now trading at a price of $148.39, T-Mobile US has moved 0.5% so far today.
Over the last year, T-Mobile US logged a -1.0% change, with its stock price reaching a high of $153.36 and a low of $124.92. Over the same period, the stock underperformed the S&P 500 index by -17.0%. As of April 2023, the company's 50-day average price was $142.2. T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. Based in Bellevue, WA, the large-cap Telecommunications company has 71,000 full time employees. T-Mobile US has offered a 0.4% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $43,310 | $44,998 | $68,397 | $80,118 | $79,571 | $78,578 |
| Gross Margins | 12% | 13% | 10% | 9% | 8% | 14% |
| Operating Margins | 12.0% | 13.0% | 10.0% | 9.0% | 8.0% | 14.0% |
| Net Margins | 7.0% | 8.0% | 4.0% | 4.0% | 3.0% | 8.0% |
| Net Income (MM) | $2,888 | $3,468 | $3,064 | $3,024 | $2,590 | $6,146 |
| Net Interest Expense (MM) | $835 | $727 | $2,483 | $3,189 | -$33 | $14 |
| Depreciation & Amort. (MM) | $6,486 | $6,616 | $14,151 | $16,383 | $13,651 | $12,888 |
| Earnings Per Share | $3.36 | $4.02 | $2.65 | $2.41 | $2.06 | $5.02 |
| Diluted Shares (MM) | 858 | 863 | 1,155 | 1,255 | 1,255 | 1,166 |
| Free Cash Flow (MM) | -$1,642 | $433 | -$2,394 | $1,591 | $2,811 | $4,326 |
| Capital Expenditures (MM) | $5,541 | $6,391 | $11,034 | $12,326 | $13,970 | $12,807 |
| Net Current Assets (MM) | -$39,469 | -$48,827 | -$110,933 | -$116,570 | -$122,615 | -$124,615 |
| Long Term Debt (MM) | $12,124 | $10,958 | $61,830 | $67,076 | $65,301 | $68,035 |
| Net Debt / EBITDA | 1.0 | 0.85 | 2.75 | 2.79 | 3.32 | 2.92 |
T-Mobile US has growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and positive EPS growth. However, the firm suffers from slimmer gross margins than its peers and weak operating margins with a stable trend. Finally, we note that T-Mobile US has significant leverage.
T-Mobile US's Valuation Is in Line With Its Sector Averages:
T-Mobile US has a trailing twelve month P/E ratio of 22.1, compared to an average of 18.85 for the Telecommunications sector. Based on its EPS guidance of $9.98, the company has a forward P/E ratio of 14.2. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 6.9%. On this basis, the company's PEG ratio is 3.19, which suggests that it is overpriced. In contrast, the market is likely undervaluing T-Mobile US in terms of its equity because its P/B ratio is 2.67 while the sector average is 3.12. The company's shares are currently trading 85.6% above their Graham number. In conclusion, T-Mobile US's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
T-Mobile US Has an Analyst Consensus of Some Upside Potential:
The 29 analysts following T-Mobile US have set target prices ranging from $118.49 to $235.0 per share, for an average of $178.02 with a buy rating. As of April 2023, the company is trading -20.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.
T-Mobile US has an average amount of shares sold short because 4.8% of the company's shares are sold short. Institutions own 43.2% of the company's shares, and the insider ownership rate stands at 54.64%, suggesting a large amount of insider shareholders. The largest shareholder is Softbank Group Corporation, whose 4% stake in the company is worth $6,430,796,775.
