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Telephone & Data Systems
(NYSE:TDS)
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Rating:55Neutral
Price Target:
$37.00
▲(7.65% Upside)
Action:Reiterated
Date:08/07/26
TDS scores as slightly below-average overall, primarily due to weak and volatile operating/cash-flow trends (sharp TTM revenue decline and a return to negative free cash flow) despite an improved balance sheet. Strategic momentum from the earnings call and recent spectrum-monetization events provides meaningful support, while technicals remain mixed and valuation/dividend metrics are favorable but not enough to offset cash-flow and execution risk.
Positive Factors
Balance Sheet Deleveraging
Material deleveraging has reduced financial risk and interest burden, leaving a sizable equity base. A stronger balance sheet increases capital allocation optionality for fiber investment, buybacks or dividends and improves resilience to cyclical telecom pressures over the next several years.
Negative Factors
Top-line Pressure from Legacy Declines
Persistent declines in legacy copper/cable revenue compress overall growth and require the fiber rollout to more than offset lost legacy sales. Until fiber scale and ARPU gains fully compensate, margin and revenue durability remain exposed to continuing legacy erosion.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Deleveraging
Material deleveraging has reduced financial risk and interest burden, leaving a sizable equity base. A stronger balance sheet increases capital allocation optionality for fiber investment, buybacks or dividends and improves resilience to cyclical telecom pressures over the next several years.
Read all positive factors
Telephone & Data Systems (TDS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.57B
Dividend Yield31%
Average Volume (3M)1.19M
Price to Earnings (P/E)19.1
Beta (1Y)0.81
Revenue Growth-56.04%
EPS GrowthN/A
CountryUS
Employees4,000
SectorCommunication Services
Sector Strength97
IndustryTelecommunications Services
Share Statistics
EPS (TTM)1.80
Shares Outstanding106,300,000
10 Day Avg. Volume1,056,580
30 Day Avg. Volume1,188,802
Financial Highlights & Ratios
PEG Ratio2.78
Price to Book (P/B)0.98
Price to Sales (P/S)3.84
P/FCF Ratio24.19
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$51.00Price Target Upside48.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.31
Revenue Forecast (FY)$1.25B
Telephone & Data Systems Business Overview & Revenue Model
Company Description
Telephone and Data Systems, Inc., a telecommunications company, provides communications services to residential, commercial, and wholesale customers in the United States. It operates through two segments: TDS Telecom and Array. The company offers ...
How the Company Makes Money
TDS makes money primarily by selling recurring connectivity services and related products. The largest revenue drivers are (1) service revenue from wireless plans and related network services and (2) service revenue from wireline broadband (intern...
Telephone & Data Systems Earnings Call Summary
Earnings Call Date:May 08, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Feb 18, 2027
Earnings Call Sentiment Positive
The call conveyed solid operational momentum in strategic growth areas—particularly fiber rollouts (record address deliveries, 32% fiber net adds, 13% fiber revenue growth) and tower/site‑rental upside—alongside decisive corporate actions (proposal to acquire remaining Array shares and continued spectrum monetization). These positives are tempered by legacy revenue declines (cable down ~10%), the DISH nonpayment reserve at Array, ongoing wind‑down costs, and sizable near‑term capital requirements. On balance the company demonstrated progressing transformation and multiple constructive catalysts while acknowledging manageable legacy headwinds and execution risks.Positive Updates
Strategic Proposal to Acquire Remaining Array Shares
Telephone and Data Systems, Inc. announced an all‑stock proposal to acquire all outstanding Array common shares not already owned at an exchange ratio of 0.86 TDS shares per Array share (assumes $10.40 per Array share dividend and prior spectrum sales), expected to qualify as a tax‑free reorganization and intended to simplify corporate structure and strengthen capital allocation.
Negative Updates
DISH Nonpayment and Revenue Recognition Impact
DISH has failed to make required payments under its master lease with Array and is in breach; Array ceased recognizing DISH revenue in Q1 and fully reserved unpaid 2025 amounts, forcing normalization adjustments and excluding DISH colocations from tenancy metrics.
Read all updates
Q1-2026 Updates
Positive
Negative
Strategic Proposal to Acquire Remaining Array Shares
Telephone and Data Systems, Inc. announced an all‑stock proposal to acquire all outstanding Array common shares not already owned at an exchange ratio of 0.86 TDS shares per Array share (assumes $10.40 per Array share dividend and prior spectrum sales), expected to qualify as a tax‑free reorganization and intended to simplify corporate structure and strengthen capital allocation.
Read all positive updates
Company Guidance
Management reiterated 2026 guidance for the Telecom business: total revenues of $1.015–$1.055 billion, adjusted EBITDA of $310–$350 million, and capital expenditures of $550–$600 million to support delivery of 200,000–250,000 new fiber service addresses (Q1 delivered 40,000 addresses and Q1 CapEx was $126 million). TDS now serves ~1.1 million fiber addresses (58% of its footprint; 79% gig‑capable), had ~11,000 residential fiber net adds in Q1 (+32% YoY), and retains a long‑term target of 2.1 million marketable addresses; the company also finished the quarter with a $520 million share‑buyback authorization. Array said its guidance for total operating revenue, adjusted EBITDA/OIBDA and capital expenditures is unchanged (ranges remain wide due to uncertainty around the T‑Mobile MLA), expects 800–1,800 tenantless towers post‑integration, and continues spectrum monetizations (Array paid a $10.25/share dividend in Q1 and a $10.40/share dividend and roughly $900 million in net proceeds were referenced in the proposed transaction assumptions).Telephone & Data Systems Financial Statement Overview
Summary
Income Statement
46
Neutral
Balance Sheet
60
Neutral
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.26B | 1.23B | 4.96B | 5.16B | 5.41B | 5.33B |
| Gross Profit | 180.89M | -62.00M | 2.83B | 2.83B | 2.85B | 2.86B |
| EBITDA | 943.30M | 553.51M | 1.20B | 682.00M | 1.08B | 1.18B |
| Net Income | 401.26M | -6.24M | -28.00M | -500.00M | 62.00M | 156.00M |
Balance Sheet | ||||||
| Total Assets | 0.00 | 8.40B | 13.68B | 13.92B | 14.55B | 13.49B |
| Cash, Cash Equivalents and Short-Term Investments | 0.00 | 765.95M | 364.00M | 236.00M | 360.00M | 367.00M |
| Total Debt | 578.35M | 1.95B | 5.10B | 5.14B | 4.80B | 4.04B |
| Total Liabilities | 1.76B | 3.13B | 7.80B | 7.91B | 7.93B | 6.75B |
| Stockholders Equity | 5.40B | 4.80B | 5.09B | 5.20B | 5.85B | 5.93B |
Cash Flow | ||||||
| Free Cash Flow | -291.30M | 195.19M | 241.00M | -199.00M | -620.00M | -48.00M |
| Operating Cash Flow | 135.32M | 589.89M | 1.15B | 1.14B | 1.16B | 1.10B |
| Investing Cash Flow | 4.28B | 2.14B | -754.00M | -1.33B | -1.78B | -2.46B |
| Financing Cash Flow | -2.75B | -2.35B | -277.00M | 56.00M | 613.00M | 321.00M |
Telephone & Data Systems Technical Analysis
Neutral
34.37
Price Trends
36.71
Negative
40.17
Negative
40.84
Negative
Market Momentum
-0.43
Negative
56.32
Neutral
76.22
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDS, the sentiment is Neutral. The current price of 34.37 is above the 20-day moving average (MA) of 34.21, below the 50-day MA of 36.71, and below the 200-day MA of 40.84, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 56.32 is Neutral, neither overbought nor oversold. The STOCH value of 76.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TDS.
Telephone & Data Systems Risk Analysis
Telephone & Data Systems disclosed 29 risk factors in its most recent earnings report. Telephone & Data Systems reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telephone & Data Systems Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
58 Neutral | $925.44M | -2.18 | -20.87% | ― | ― | ― | |
55 Neutral | $3.57B | 19.12 | 2.75% | 30.29% | -56.04% | ― | |
50 Neutral | $6.57B | -3.66 | -52.11% | ― | -6.78% | -452.12% | |
49 Neutral | $663.82M | -14.80 | -4.77% | 0.96% | 5.01% | -23.53% | |
43 Neutral | $226.86M | -0.70 | -22.76% | ― | -5.27% | -1495.76% | |
43 Neutral | $298.42M | -0.08 | 180.25% | ― | -3.98% | -2821.86% |
* Communication Services Sector Average
TDS
Telephone & Data Systems
36.00
-2.12
-5.55%
LUMN
Lumen Technologies
5.90
2.20
59.46%
SHEN
Shenandoah Telecommunications Co
13.41
0.80
6.39%
CABO
Cable ONE
44.48
-91.34
-67.25%
OPTU
Optimum Communications Inc Class A
0.80
-1.39
-63.29%
GLIBA
GCI Liberty, Inc. Class A
24.42
-11.54
-32.09%
Telephone & Data Systems Corporate Events
Business Operations and StrategyDividendsM&A Transactions
TDS Unit Completes Spectrum Sale, Declares Special Dividend
Positive
Jun 1, 2026
On June 1, 2026, Array Digital Infrastructure, Inc., a subsidiary of Telephone and Data Systems, completed the previously announced $1.0 billion cash sale of select spectrum assets to Verizon Communications Inc., marking a substantial monetization...
Executive/Board ChangesShareholder Meetings
TDS Shareholders Approve Board Slate and Governance Changes
Positive
May 26, 2026
At its May 21, 2026 Annual Meeting of Shareholders, Telephone and Data Systems, Inc. shareholders elected eight directors by holders of Series A Common Shares and four directors by holders of Common Shares, confirming the company’s board sla...
Business Operations and StrategyDividendsM&A Transactions
TDS Proposes All-Stock Merger to Acquire Array
Positive
May 8, 2026
On May 8, 2026, Telephone and Data Systems, Inc. announced it has submitted a non-binding proposal to acquire, via an all-stock merger, all outstanding common shares of Array Digital Infrastructure, Inc. that it does not already own. TDS, which cu...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.