T-Mobile US logged a -0.2% change during today's morning session, and is now trading at a price of $240.43 per share.
T-Mobile US returned gains of 26.9% last year, with its stock price reaching a high of $276.49 and a low of $186.52. Over the same period, the stock outperformed the S&P 500 index by 6.1%. More recently, the company's 50-day average price was $235.3. T-Mobile US, Inc., together with its subsidiaries, provides wireless communications services in the United States, Puerto Rico, and the United States Virgin Islands. Based in Bellevue, WA, the Large-Cap Telecommunications company has 70,000 full time employees. T-Mobile US has offered a 1.5% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2021 | 2022 | 2023 | 2023 | 2024 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $80,118 | $79,571 | $78,558 | $78,558 | $81,400 | $81,400 |
| Operating Margins | 9% | 8% | 18% | 18% | 22% | 22% |
| Net Margins | 4% | 3% | 11% | 11% | 14% | 14% |
| Net Income (M) | $3,024 | $2,590 | $8,317 | $8,317 | $11,339 | $11,339 |
| Net Interest Expense (M) | $3,189 | -$3,364 | -$3,335 | -$3,335 | -$3,411 | -$3,411 |
| Depreciation & Amort. (M) | $16,383 | $13,651 | $12,818 | $12,818 | $12,100 | $12,100 |
| Diluted Shares (M) | 1,255 | 1,255 | 1,200 | 1,200 | 1,173 | 1,173 |
| Earnings Per Share | $2.41 | $2.06 | $6.93 | $6.93 | $9.66 | $9.66 |
| EPS Growth | n/a | -14.52% | 236.41% | 0.0% | 39.39% | 0.0% |
| Avg. Price | $130.23 | $125.25 | $151.56 | $151.56 | $241.01 | $241.01 |
| P/E Ratio | 53.81 | 60.51 | 21.59 | 21.59 | 24.85 | 24.85 |
| Free Cash Flow (M) | $1,591 | $2,811 | $8,758 | $8,758 | $13,453 | $13,453 |
| CAPEX (M) | $12,326 | $13,970 | $9,801 | $9,801 | $8,840 | $8,840 |
| EV / EBITDA | 9.95 | 11.09 | 9.54 | 9.54 | 12.05 | 12.05 |
| Total Debt (M) | $76,438 | $71,960 | $78,637 | $78,637 | $82,333 | $82,333 |
| Net Debt / EBITDA | 3.0 | 3.34 | 2.71 | 2.71 | 2.55 | 2.55 |
| Current Ratio | 0.89 | 0.77 | 0.91 | 0.91 | 0.91 | 0.91 |
T-Mobile US has strong operating margins with a positive growth rate, exceptional EPS growth, and generally positive cash flows. However, the firm suffers from slight revenue growth and decreasing reinvestment in the business and not enough current assets to cover current liabilities because its current ratio is 0.91. Finally, we note that T-Mobile US has significant leverage levels.
T-Mobile US's Valuation Is in Line With Its Sector Averages:
T-Mobile US has a trailing twelve month P/E ratio of 22.2, compared to an average of 18.22 for the Telecommunications sector. Based on its EPS guidance of $10.67, the company has a forward P/E ratio of 22.1. According to the 23.7% compound average growth rate of T-Mobile US's historical and projected earnings per share, the company's PEG ratio is 0.94. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 14.9%. On this basis, the company's PEG ratio is 1.49. This implies that the shares are fairly valued. In contrast, T-Mobile US is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.44 is higher than the sector average of 1.86. The company's shares are currently trading 124.8% below 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 28 analysts following T-Mobile US have set target prices ranging from $200.0 to $309.0 per share, for an average of $270.77 with a buy rating. The company is trading -11.2% 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 3.0% of the company's shares are sold short. Institutions own 38.0% of the company's shares, and the insider ownership rate stands at 58.49%, suggesting a large amount of insider shareholders. The largest shareholder is Softbank Group Corporation, whose 8% stake in the company is worth $20,522,934,313.
