Telephone & Data Systems (TDS) AI Stock Analysis

• Market Cap: $4.26B
• Dividend Yield: 0.41%
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: -5.62%
• EPS Growth: 80.09%
• Country: US
• Employees: 7,900
• Sector: Communication Services
• Sector Strength: 96
• Industry: Telecommunications Services
• EPS (TTM): -0.05
• Shares Outstanding: 108,000,000
• 10 Day Avg. Volume: 1,188,562
• 30 Day Avg. Volume: 1,437,222
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.47
• Enterprise Value/Revenue: 2.19
• Enterprise Value/Gross Profit: 4.14
• Enterprise Value/Ebitda: 8.95
• 1Y Price Target: $52.00
• Price Target Upside: 31.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 55 Neutral
• Price Target: $40.00 ▲(1.24% Upside)

TDS's overall stock score is driven by significant financial challenges and a negative valuation outlook. However, positive technical indicators and strategic corporate actions, including asset sales and debt reduction, provide some optimism. The earnings call and corporate events highlight efforts to improve financial stability, but profitability and cash flow issues remain a concern.

Telephone & Data Systems Business Overview & Revenue Model

Company Description

Telephone and Data Systems, Inc., a telecommunications company, provides communications services in the United States. It operates through two segments: UScellular and TDS Telecom. The company offers wireless solutions to consumers and business and government customers, including a suite of connected Internet of things (IoT) solutions, and software applications for monitor and control, business automation/operations, communication, fleet and asset management, smart water solutions, private cellular networks and custom, and end-to-end IoT solutions; wireless priority services and quality priority and preemption options; smartphones and other handsets, tablets, wearables, mobile hotspots, routers, and IoT devices; and accessories, such as cases, screen protectors, chargers, and memory cards, as well as consumer electronics, including audio, home automation and networking products. It also provides replace and repair services; Trade-In program through which it buys customers' used equipment; internet connections and all-home WI-FI services; TDS TV+, an integrated cloud television platform that offers video content; local and long-distance telephone service, VoIP, and enhanced services; and broadband, IP-based services, and hosted voice and video collaboration services. The company sells its products through retail sales, direct and indirect sales, third-party retailers, and independent agents, as well as through ecommerce and telesales. As of December 31, 2021, it offers its services to customers 5 million wireless connections, and 1.2 million wireline and cable connections. The company was incorporated in 1968 and is headquartered in Chicago, Illinois.

How the Company Makes Money

TDS generates revenue through multiple streams, primarily from its telecommunications services. The main revenue sources include residential and business broadband services, voice services, and video services offered by TDS Telecom. In the wireless segment, U.S. Cellular earns revenue through mobile voice and data plans, device sales, and accessory sales. The company also benefits from partnerships with various technology providers and infrastructure investments that enhance service offerings and customer reach. Additionally, TDS may earn revenue through ancillary services, such as installation fees and equipment leasing, contributing to its overall earnings.

Telephone & Data Systems Financial Statement Overview

Summary

TDS faces significant financial challenges with declining revenues and profitability issues. The income statement shows negative revenue growth and net profit margin. The balance sheet is stable in leverage but suffers from negative returns. Cash flow management is weak with negative operating cash flow and free cash flow growth.

Income Statement

The income statement shows declining revenue with a negative revenue growth rate of -1.07% TTM. Gross profit margin remains relatively stable at 52.83% TTM, but the net profit margin is negative at -0.85% TTM, indicating losses. EBIT and EBITDA margins are low, suggesting operational challenges. Overall, the company faces profitability issues with declining revenues.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 1.02 TTM, indicating balanced leverage. However, the return on equity is negative at -0.81% TTM, highlighting profitability challenges. The equity ratio is stable, suggesting a reasonable capital structure. Despite manageable leverage, profitability remains a concern.

Cash Flow

Cash flow analysis reveals significant challenges, with a negative free cash flow growth rate of -8884.28% TTM. Operating cash flow is negative, and the operating cash flow to net income ratio is highly negative, indicating cash flow issues. The free cash flow to net income ratio is slightly positive, but overall cash flow management is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.80B	4.96B	5.16B	5.41B	5.33B	5.22B
Gross Profit	2.54B	2.83B	2.83B	2.85B	2.86B	2.87B
EBITDA	1.18B	1.20B	682.00M	1.08B	1.18B	1.19B
Net Income	-41.00M	-28.00M	-500.00M	62.00M	156.00M	226.00M
Balance Sheet
Total Assets	13.53B	13.68B	13.92B	14.55B	13.49B	12.53B
Cash, Cash Equivalents and Short-Term Investments	559.00M	364.00M	236.00M	360.00M	367.00M	1.43B
Total Debt	5.08B	5.10B	5.14B	4.80B	4.04B	4.50B
Total Liabilities	7.70B	7.80B	7.91B	7.93B	6.75B	6.92B
Stockholders Equity	5.00B	5.09B	5.20B	5.85B	5.93B	4.80B
Cash Flow
Free Cash Flow	398.00M	241.00M	-199.00M	-620.00M	-48.00M	164.00M
Operating Cash Flow	1.13B	1.15B	1.14B	1.16B	1.10B	1.53B
Investing Cash Flow	-553.00M	-754.00M	-1.33B	-1.78B	-2.46B	-1.51B
Financing Cash Flow	-360.00M	-277.00M	56.00M	613.00M	321.00M	957.00M

Telephone & Data Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDS, the sentiment is Positive. The current price of 39.51 is above the 20-day moving average (MA) of 39.27, above the 50-day MA of 38.35, and above the 200-day MA of 35.92, indicating a bullish trend. The MACD of 0.47 indicates Positive momentum. The RSI at 53.35 is Neutral, neither overbought nor oversold. The STOCH value of 54.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TDS.

Telephone & Data Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKC	81 Outperform	$4.79B	11.02	7.38%	5.84%	19.25%	5.69%
VEON	74 Outperform	$4.00B	3.87	89.94%	―	8.66%	―
AD	61 Neutral	$4.56B	―	-0.54%	43.78%	-3.65%	-134.04%
Sector *	60 Neutral	$46.29B	4.07	-13.11%	4.12%	1.85%	-42.71%
TEO	56 Neutral	$3.61B	22.47	-0.27%	2.39%	3.89%	-107.44%
TDS	55 Neutral	$4.26B	―	-0.81%	0.41%	-5.62%	80.09%
LUMN	51 Neutral	$5.10B	―	-78.94%	―	-6.50%	43.47%

Telephone & Data Systems Corporate Events

Telephone & Data Systems Settles Outstanding Debts

On August 19, 2025, Telephone and Data Systems, Inc. (TDS) settled all its outstanding debts and obligations under several credit agreements, including those with CoBank, Wells Fargo National Association, and Oaktree Fund Administration, LLC. The termination of the credit agreement with Oaktree resulted in a $9 million penalty, impacting the company’s financial obligations and potentially influencing its future financial strategies.

Telephone & Data Systems Sells Wireless Assets to T-Mobile

On August 1, 2025, Array, a subsidiary of Telephone & Data Systems, completed a series of significant transactions, including the sale of its wireless operations and select spectrum assets to T-Mobile for approximately $4.3 billion. This transaction involved the transfer of spectrum licenses and was followed by the termination of Array’s securitization facility and bank facilities without incurring penalties. Additionally, Array declared a special cash dividend of $23.00 per share for its stockholders, scheduled for payment on August 19, 2025. These strategic moves are expected to streamline Array’s operations and strengthen its financial position.

Telephone & Data Systems Announces New Interim CEO

On July 24, 2025, UScellular, a subsidiary of Telephone and Data Systems, Inc., announced the appointment of Douglas W. Chambers as interim President and CEO, contingent upon the closing of a Securities Purchase Agreement involving TDS, UScellular, T-Mobile US, Inc., and USCC Wireless Holdings, LLC. This leadership change will result in the separation of Laurent C. Therivel from his role as President and CEO of UScellular, impacting the executive structure of TDS.

Telephone & Data Systems Updates Credit Agreement

On June 25, 2025, UScellular, a subsidiary of Telephone & Data Systems, Inc., entered into a Fourth Amended and Restated Credit Agreement, as disclosed in their Form 8-K. This agreement may have implications for the company’s financial operations and industry positioning.

T-Mobile Announces Exchange Offers Involving USCC Notes

On June 16, 2025, T-Mobile USA announced the preliminary results of its Exchange Offers, which involved exchanging certain senior notes issued by United States Cellular Corporation, a subsidiary of Telephone and Data Systems, Inc., for new notes to be issued by T-Mobile USA. The Exchange Offers also included soliciting consents from holders of the USCC Notes to modify or eliminate certain notice requirements and restrictive covenants, potentially impacting the company’s financial structure and stakeholder agreements.

Telephone & Data Systems Elects Directors at Shareholder Meeting

At the Annual Meeting of Shareholders on May 22, 2025, Telephone & Data Systems announced the election of directors and the approval of key proposals. Eight directors were elected by holders of Series A Common Shares and four by holders of Common Shares. Additionally, the selection of PricewaterhouseCoopers LLP as independent accountants for 2025 was ratified, and the compensation of named executive officers was approved.