T Mobile US (TMUS) AI Stock Analysis

• Market Cap: $291.03B
• Dividend Yield: 1.2%
• Average Volume (3M): 4.48M
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.53
• Revenue Growth: 3.62%
• EPS Growth: 38.24%
• Country: US
• Employees: 70,000
• Sector: Communication Services
• Sector Strength: 98
• Industry: Telecommunications Services
• EPS (TTM): 9.68
• Shares Outstanding: 1,141,745,000
• 10 Day Avg. Volume: 5,006,928
• 30 Day Avg. Volume: 4,482,364
• PEG Ratio: 0.69
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.59
• Price to Cash Flow (P/CF): 13.20
• P/FCF Ratio: 10.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $267.61
• Price Target Upside: 4.49% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

T-Mobile US scores highly due to its strong financial performance, positive technical indicators, and optimistic earnings guidance. The company's strategic initiatives, such as the appointment of a new COO to enhance 5G capabilities, further strengthen its growth prospects. However, a relatively high P/E ratio suggests a potential overvaluation, and the high debt levels are a risk factor that the company needs to manage carefully.

Positive Factors

5G Network Quality

T-Mobile’s higher than peer switching and new customer share is attributable to increasing awareness of its premium 5G network quality.

Spectrum Acquisition

The spectrum sale will increase the probability of FCC approval for its pending US Cellular spectrum acquisition.

Negative Factors

Wireless Competition

The risk that wireless competition may elevate further and increase A&R costs is not good for category multiples, especially for the premium at which TMUS trades.

T Mobile US Business Overview & Revenue Model

Company Description

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services to 108.7 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, wearables, and tablets and other mobile communication devices, as well as wireless devices and accessories. In addition, the company offers services, devices, and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites. As of December 31, 2021, it operated approximately 102,000 macro cell and 41,000 small cell/distributed antenna system sites. The company was founded in 1994 and is headquartered in Bellevue, Washington.

How the Company Makes Money

T-Mobile US generates revenue primarily through the provision of wireless communications services to consumers and businesses. Its key revenue streams include postpaid and prepaid wireless service plans, which offer a variety of voice, messaging, and data options. The company also earns money from the sale of mobile devices, accessories, and equipment. Additionally, T-Mobile benefits from wholesale services and roaming agreements with other telecommunications providers. Significant factors contributing to its earnings include strategic partnerships, such as its merger with Sprint Corporation, which expanded its customer base and network capabilities, and its investment in 5G technology, enhancing service offerings and attracting new customers.

T Mobile US Financial Statement Overview

Summary

T-Mobile US showcases robust financial health with strong revenue growth and profitability metrics. While the company efficiently manages its operations and cash flows, the balance sheet indicates a high reliance on debt, which is a common trait in the telecommunications sector. Overall, the company's financial position is solid, with strong operational and cash flow performance, though it should monitor leverage levels to mitigate potential risks.

Income Statement

T-Mobile US demonstrated strong financial performance with significant revenue growth over previous years, achieving a 3.6% growth in 2024. The company maintains healthy margins with a gross profit margin of 100% and a net profit margin of 13.9% for 2024, indicating efficient cost management. The EBIT margin stands at 22.1%, and the EBITDA margin is 21.5%, reflecting robust operational efficiency.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 1.76, which is typical for the telecommunications industry and indicates a balanced use of debt and equity. The return on equity is impressive at 18.4%, signifying strong shareholder returns. However, a lower equity ratio of 29.7% suggests a higher reliance on liabilities, which poses potential risk if financial markets fluctuate.

Cash Flow

T-Mobile US has shown an impressive free cash flow growth rate of 73.6% over the past year, indicating effective cash management and capacity for reinvestment or debt reduction. The operating cash flow to net income ratio of 1.97 suggests that the company's operational activities are generating sufficient cash relative to its net income. With a free cash flow to net income ratio of 1.19, the company demonstrates strong cash conversion efficiency.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
81.40B	78.56B	79.57B	80.12B	68.40B
	Gross Profit
81.40B	45.89B	43.37B	43.51B	40.13B
	EBIT
18.01B	14.27B	6.54B	6.89B	6.64B
	EBITDA
31.04B	26.93B	27.13B	26.38B	23.58B
	Net Income Common Stockholders
11.34B	8.32B	2.59B	3.02B	3.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.41B	5.13B	4.51B	6.63B	10.38B
	Total Assets
208.03B	207.68B	211.34B	206.56B	200.16B
	Total Debt
108.78B	113.09B	107.86B	106.01B	104.22B
	Net Debt
103.37B	107.95B	103.35B	99.38B	93.83B
	Total Liabilities
146.29B	142.97B	141.68B	137.46B	134.82B
	Stockholders Equity
61.74B	64.72B	69.66B	69.10B	65.34B
Cash Flow		Free Cash Flow
9.98B	7.75B	-520.00M	-7.78B	-3.73B
	Operating Cash Flow
22.29B	18.56B	16.78B	13.92B	8.64B
	Investing Cash Flow
-9.07B	-5.83B	-12.36B	-19.39B	-12.71B
	Financing Cash Flow
-12.81B	-12.10B	-6.45B	1.71B	13.01B

T Mobile US Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 256.12
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TMUS, the sentiment is Positive. The current price of 256.12 is below the 20-day moving average (MA) of 259.11, below the 50-day MA of 258.18, and above the 200-day MA of 220.64, indicating a neutral trend. The MACD of 2.88 indicates Negative momentum. The RSI at 60.95 is Neutral, neither overbought nor oversold. The STOCH value of 75.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TMUS.

T Mobile US Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMUS	82 Outperform	$291.03B	26.37	17.93%	1.20%	3.62%	38.24%
T	76 Outperform	$190.01B	17.74	10.54%	4.19%	-0.08%	-24.48%
VZ	73 Outperform	$181.00B	10.35	18.27%	6.26%	0.61%	50.39%
Sector *	58 Neutral	$26.94B	3.15	-10.67%	4.32%	2.14%	-43.11%
LUMN	47 Neutral	$3.85B	―	-12.49%	―	-9.95%	99.47%
CMTL	44 Neutral	$43.14M	―	-53.44%	―	-13.06%	-465.17%
SHEN	41 Neutral	$692.29M	―	-4.05%	0.79%	14.16%	-443.30%

T Mobile US Corporate Events

T-Mobile US Approves Executive Performance-Based Stock Units

On February 11, 2025, T-Mobile US, Inc.’s Compensation Committee approved performance-based restricted stock units (PRSUs) for several executives, effective April 1, 2025. These PRSUs are tied to the company’s core adjusted EBITDA performance from January 1, 2027, to December 31, 2027, with vesting contingent on continued employment through April 1, 2028. This move aims to align executive incentives with company performance, potentially impacting stakeholder interests and company operations.

T-Mobile US Amends Executive Compensation Plans

On March 17, 2025, T-Mobile US, Inc. amended its stock unit awards for executives, allowing for vesting under certain termination conditions, potentially impacting executive retention and alignment with company performance. Additionally, on March 18, 2025, T-Mobile entered into a compensation agreement with Michael J. Katz, ensuring his continued employment with a competitive salary and incentives, which may influence the company’s strategic marketing and product development initiatives.

T-Mobile US Appoints New COO for Growth

T-Mobile US has appointed Srinivasan Gopalan as the new Chief Operating Officer, effective March 1, 2025. Gopalan, with extensive experience in technology and telecommunications, will focus on enhancing T-Mobile’s customer experience and advancing technology initiatives, particularly in 5G, to support the company’s growth strategy. His leadership is expected to bolster T-Mobile’s market position and drive its transformation into a digital-first company.