T-Mobile US, Inc. (TMUS), headquartered in Bellevue, Washington, is a nationwide wireless service provider that provides reliable connectivity through its 4G LTE and transformative 5G network. Valued at $222.49 billion by market cap, the company offers its voice, messaging, and data services to customers in the postpaid, prepaid, wholesale, and other services through its flagship brands, T-Mobile, Metro by T-Mobile, and Mint Mobile.
Shares of this leading wireless service provider have outperformed the broader market over the past year. TMUS has gained 40.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 17.7%. In 2024, TMUS stock is up 19.4%, compared to SPX’s 11.5% returns on a YTD basis.
Narrowing the focus, TMUS’ gains over the past 52 weeks easily overshadow the S&P 500 Communication Sector SPDR (XLC). The exchange-traded fund has gained about 24.1% over this period. Moreover, the stock’s returns on a YTD basis outshine the ETF’s 16.4% gains over the same time frame.
On Jul. 31, TMUS shares gained 3.1% after the company reported its Q2 results. Its EPS came in at $2.49, beating the consensus estimates of $2.27. The company’s revenue was $19.77 billion, surpassing Wall Street expectations of $19.51 billion. During the quarter, its postpaid net customer additions were 1.3 million, crossing the 100 million postpaid customers' mark. Moreover, it reported a record-high adjusted free cash flow of $4.4 billion, rising 54% year over year.
For the current fiscal year, ending in December, analysts expect TMUS’s EPS to grow 32% to $9.15 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 22 analysts covering TMUS stock, the consensus rating is a “Strong Buy.” That’s based on 17 “Strong Buy” ratings, three “Moderate Buys,” and two “Holds.”
This configuration is more bullish than three months ago, with 15 suggesting a “Strong Buy.”
Recently, Scotiabank kept its “Sector Outperform” rating on TMUS stock and raised the price target from $194.50 to $197, implying a potential upside of 3.8% from current levels.
The mean price target of $198.12 represents a 4.4% premium to TMUS’s current price levels. The Street-high price target of $225 suggests an upside potential of 18.5%.
On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
