Telephone & Data Systems (TDS) AI Stock Analysis

• Market Cap: $4.81B
• Dividend Yield: 0.39%
• Average Volume (3M): 1.05M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: -22.79%
• EPS Growth: 79.90%
• Country: US
• Employees: 7,900
• Sector: Communication Services
• Sector Strength: 97
• Industry: Telecommunications Services
• EPS (TTM): -0.84
• Shares Outstanding: 108,000,000
• 10 Day Avg. Volume: 1,170,582
• 30 Day Avg. Volume: 1,048,738
• PEG Ratio: 1.67
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.78
• P/FCF Ratio: 16.14
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 1.28
• Enterprise Value/Gross Profit: 2.33
• Enterprise Value/Ebitda: 4.74
• 1Y Price Target: $51.00
• Price Target Upside: 13.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.48
• Revenue Forecast (FY): $1.28B

• Rating: 60 Neutral
• Price Target: $44.00 ▼(-1.70% Downside)

The score is held back primarily by weak financial performance (declining revenue, losses, and deteriorating free cash flow) and elevated leverage. These are partially offset by improving technical momentum (price above major moving averages with positive MACD) and supportive shareholder/capital-allocation actions discussed on the earnings call, while valuation is mixed due to a high yield but negative P/E.

Positive Factors

Spectrum monetization and cash return

Completing a large spectrum sale and returning proceeds materially strengthens TDS liquidity and capital position. This provides durable funding for debt reduction, fiber investment and shareholder returns, reducing refinancing risk and enabling strategic optionality over the medium term.

Fiber network scale and growth

Reaching 1M fiber addresses signals durable expansion into high-margin, sticky broadband services. Scale in fiber increases competitive differentiation, supports higher ARPU and churn reduction, and establishes a long-term revenue base resilient to legacy voice declines.

Improved financing flexibility

Enhanced credit terms and added capacity materially improve TDS's ability to fund capital-intensive fiber builds and opportunistic M&A. Longer maturities and better covenant mechanics lower near-term refinancing risk and support steady execution of multi-year infrastructure plans.

Negative Factors

Declining revenue and negative profitability

A substantial revenue decline and negative margins undermine economies of scale and long-run profitability. Persistent top-line erosion reduces cash available for capex and debt service, making sustained investment in fiber and competitive positioning harder without structural revenue recovery.

High leverage and weakening free cash flow

Material leverage combined with shrinking free cash flow constrains financial flexibility in a capital-intensive industry. This raises sensitivity to slower operating cash generation or higher interest costs, limiting room for capex cycles, M&A or sustained shareholder distributions over the medium term.

Operational execution and legacy cost pressures

Execution delays, contractual disputes and elevated SG&A at Array threaten the pace and economics of strategic initiatives. Persistent build underperformance and legacy cost drag can slow customer additions, raise unit costs, and impair returns on multi-year fiber investments.

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 channels, with its primary earnings coming from its wireless and wireline segments. The wireless segment, primarily through U.S. Cellular, earns money by providing mobile voice and data services to customers via subscription plans, as well as selling mobile devices and accessories. The wireline segment, operated by TDS Telecom, derives revenue from broadband internet services, voice services, and other telecommunications services provided to residential and business clients. Additionally, TDS benefits from partnerships with various technology and service providers, enabling it to offer bundled services and leverage economies of scale. The company also invests in network infrastructure to enhance service delivery, which in turn can drive customer acquisition and retention, further contributing to its revenue growth.

Telephone & Data Systems Financial Statement Overview

Summary

Financials are pressured by a sharp revenue decline (TTM down 19.06%) and negative profitability (negative net margin; low EBIT/EBITDA margins). Leverage is elevated (debt-to-equity 1.02) and ROE is negative, while cash generation is weakening (TTM free cash flow growth down 28.08%), partly offset by a reasonably stable asset base and positive operating cash flow to net income relationship.

Income Statement

The income statement shows a declining trend in revenue with a significant drop of 19.06% in the TTM period. Gross profit margin remains relatively stable, but net profit margin is negative, indicating losses. The EBIT and EBITDA margins are low, reflecting operational challenges.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio of 1.02, suggesting significant leverage. Return on equity is negative, highlighting profitability issues. However, the equity ratio is reasonable, indicating a stable asset base.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 28.08% in the TTM period. The operating cash flow to net income ratio is positive, but the free cash flow to net income ratio is low, indicating cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.89B	4.96B	5.16B	5.41B	5.33B	5.22B
Gross Profit	2.14B	2.83B	2.83B	2.85B	2.86B	2.87B
EBITDA	1.05B	1.20B	682.00M	1.08B	1.18B	1.19B
Net Income	-56.75M	-28.00M	-500.00M	62.00M	156.00M	226.00M
Balance Sheet
Total Assets	8.53B	13.68B	13.92B	14.55B	13.49B	12.53B
Cash, Cash Equivalents and Short-Term Investments	932.99M	364.00M	236.00M	360.00M	367.00M	1.43B
Total Debt	1.41B	5.10B	5.14B	4.80B	4.04B	4.50B
Total Liabilities	3.25B	7.80B	7.91B	7.93B	6.75B	6.92B
Stockholders Equity	4.47B	5.09B	5.20B	5.85B	5.93B	4.80B
Cash Flow
Free Cash Flow	286.25M	241.00M	-199.00M	-620.00M	-48.00M	164.00M
Operating Cash Flow	784.31M	1.15B	1.14B	1.16B	1.10B	1.53B
Investing Cash Flow	2.05B	-754.00M	-1.33B	-1.78B	-2.46B	-1.51B
Financing Cash Flow	-2.37B	-277.00M	56.00M	613.00M	321.00M	957.00M

Telephone & Data Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 44.76 is above the 20-day moving average (MA) of 41.33, above the 50-day MA of 39.66, and above the 200-day MA of 37.72, indicating a bullish trend. The MACD of 1.28 indicates Negative momentum. The RSI at 75.61 is Negative, neither overbought nor oversold. The STOCH value of 94.18 is Negative, 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
VEON	75 Outperform	$3.77B	5.84	53.38%	―	6.42%	―
TKC	74 Outperform	$5.23B	12.49	7.60%	5.57%	19.02%	9.26%
AD	63 Neutral	$4.83B	19.76	4.11%	42.91%	-25.64%	―
TEO	61 Neutral	$4.99B	-31.95	-2.95%	0.40%	15.38%	-292.52%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TDS	60 Neutral	$4.81B	-41.45	1.73%	0.39%	-22.79%	79.90%
LUMN	53 Neutral	$8.87B	-5.09	―	―	-4.56%	23.46%

Telephone & Data Systems Corporate Events

TDS Unit Completes Spectrum Sale and Declares Dividend

On January 13, 2026, Array Digital Infrastructure, Inc., a subsidiary of Telephone and Data Systems, Inc., completed the previously announced sale of select wireless spectrum assets, including 700 MHz licenses, to AT&T for $1.018 billion in cash under a purchase agreement originally signed on November 6, 2024, with no portion of the consideration deferred. On the same date, Array’s board declared a special cash dividend of $10.25 per share for holders of its Common Stock and Series A Common Stock, with Telephone and Data Systems holding over 70 million shares eligible for this payout and the dividend scheduled to be paid on February 2, 2026 to shareholders of record as of January 23, 2026, returning a substantial portion of the transaction proceeds to equity holders.

The most recent analyst rating on (TDS) stock is a Buy with a $51.00 price target. To see the full list of analyst forecasts on Telephone & Data Systems stock, see the TDS Stock Forecast page.

TDS Amends Credit Agreements to Boost Flexibility

On December 8, 2025, Telephone and Data Systems, Inc. (TDS) and its subsidiary, Array Digital Infrastructure, Inc., entered into amendments to their respective credit agreements. The amendments extend the maturity date of TDS’s credit agreement, remove the credit spread adjustment for the Term SOFR interest rate, adjust the calculation of the consolidated leverage ratio, and increase the capacity for secured and unsecured debt by $300 million. These changes are expected to impact TDS’s financial flexibility and borrowing capacity, potentially influencing its strategic operations and market positioning.

The most recent analyst rating on (TDS) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Telephone & Data Systems stock, see the TDS Stock Forecast page.