United States Cellular (USM) AI Stock Analysis

• Market Cap: $5.48B
• Dividend Yield: N/A
• Average Volume (3M): 179.94K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.37
• Revenue Growth: -3.48%
• EPS Growth: -169.60%
• Country: US
• Employees: 4,100
• Sector: Communication Services
• Sector Strength: 73
• Industry: Telecommunications Services
• EPS (TTM): -0.46
• Shares Outstanding: 52,000,000
• 10 Day Avg. Volume: 220,878
• 30 Day Avg. Volume: 179,939
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.53
• Price to Cash Flow (P/CF): 11.80
• P/FCF Ratio: 8.60
• 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: $85.33
• Price Target Upside: 36.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

United States Cellular's stock score reflects a mix of strengths and challenges. The company benefits from strong cash flow management and strategic initiatives in fiber expansion and debt reduction. However, declining service revenues and profitability, coupled with valuation challenges due to a negative P/E ratio, weigh on the stock. The positive technical indicators provide some support, but uncertainties in strategic transactions and competitive pressures remain key risks.

Positive Factors

Asset Divestitures

SOTP implies more headroom to equity value unlock from asset divestitures.

Financial Performance

US Cellular reported solid third-quarter results and raised its 2024 EBITDA guidance.

Monetizing Assets

The ability of USM to monetize assets is encouraging, with further potential in its spectrum holdings and possibly its towers portfolio.

Negative Factors

Market Competition

The company focuses on retention efforts and competitive pricing, leading to improved results despite elevated competition.

Regulatory Approval

Confidence in the likelihood of USM's announced deals being approved has increased, leading to a revised price target of $85.

Strategic Uncertainty

Lingering questions regarding Towers strategy long-term.

United States Cellular Business Overview & Revenue Model

Company Description

United States Cellular (USM) is a wireless telecommunications service provider operating primarily in the United States. The company focuses on delivering high-quality network coverage and customer service across its regional and rural markets. US Cellular offers a range of products and services including voice, messaging, and data services, along with a variety of devices such as smartphones, tablets, and accessories. It caters to both individual consumers and business clients, aiming to enhance connectivity and communication solutions.

How the Company Makes Money

United States Cellular makes money primarily through its subscription-based services. The company's revenue streams include postpaid and prepaid wireless plans, which provide recurring monthly income from individual and family customers. US Cellular also generates revenue from data packages and roaming charges. Additionally, the sale of mobile devices and accessories contributes to its earnings. The company leverages partnerships with device manufacturers and network infrastructure providers to enhance its service offerings. US Cellular's focus on customer service and competitive pricing also plays a significant role in attracting and retaining subscribers, thus sustaining its revenue base.

United States Cellular Financial Statement Overview

Summary

United States Cellular faces challenges with declining revenue and profitability, as shown by negative net income and EBIT margins. However, strong cash flow management and a solid equity position provide stability. The company needs to address operational inefficiencies and leverage its cash flow strength to improve overall financial health.

Income Statement

The company's recent annual revenue decreased to $3.77 billion from $3.91 billion, indicating a negative revenue growth rate. The gross profit margin improved significantly to 76.0%, but the net profit margin turned negative with a net loss of $39 million. EBIT margin is also negative, reflecting operational challenges. Despite a robust EBITDA margin of 13.6%, the overall profitability metrics suggest declining performance.

Balance Sheet

The balance sheet shows a solid equity base with stockholders' equity of $4.58 billion. However, the debt-to-equity ratio is 0.21, indicating manageable leverage levels. The equity ratio cannot be calculated due to missing total assets data, but previous data suggests a stable equity position. Continued high debt levels pose potential risks if profitability does not improve.

Cash Flow

The company's free cash flow increased significantly, showing a positive growth trend. Operating cash flow is strong at $883 million, and the operating cash flow to net income ratio is robust due to positive cash generation despite a net loss. Free cash flow to net income is also favorable, highlighting efficient cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.77B	3.91B	4.17B	4.12B	4.04B
	Gross Profit
2.86B	2.18B	2.20B	2.21B	2.24B
	EBIT
-12.00M	139.00M	256.00M	376.00M	380.00M
	EBITDA
512.00M	1.06B	1.03B	1.13B	1.15B
	Net Income Common Stockholders
-39.00M	54.00M	30.00M	155.00M	229.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	150.00M	273.00M	156.00M	1.27B
	Total Assets
10.45B	10.75B	11.12B	10.34B	9.68B
	Total Debt
985.00M	4.03B	4.18B	3.75B	3.48B
	Net Debt
985.00M	3.88B	3.90B	3.59B	2.21B
	Total Liabilities
5.84B	6.10B	6.54B	5.77B	5.25B
	Stockholders Equity
4.58B	4.63B	4.55B	4.55B	4.41B
Cash Flow		Free Cash Flow
346.00M	128.00M	-355.00M	-1.24B	47.00M
	Operating Cash Flow
883.00M	866.00M	832.00M	802.00M	1.24B
	Investing Cash Flow
-556.00M	-721.00M	-1.18B	-2.04B	-1.16B
	Financing Cash Flow
-347.00M	-274.00M	456.00M	142.00M	926.00M

United States Cellular Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 62.61
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For USM, the sentiment is Negative. The current price of 62.61 is below the 20-day moving average (MA) of 66.98, below the 50-day MA of 65.75, and above the 200-day MA of 60.14, indicating a neutral trend. The MACD of 1.31 indicates Negative momentum. The RSI at 64.95 is Neutral, neither overbought nor oversold. The STOCH value of 78.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for USM.

United States Cellular Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PHI	76 Outperform	$4.66B	8.16	29.05%	5.98%	-0.15%	17.96%
TKC	75 Outperform	$5.08B	11.31	6.76%	2.65%	8.78%	-21.85%
SKM	69 Neutral	$8.00B	8.95	11.19%	5.41%	-2.34%	12.31%
USM	65 Neutral	$5.48B	―	-0.85%	―	-3.48%	-169.60%
TEO	63 Neutral	$5.13B	4.42	23.27%	―	-26.74%	―
Sector *	58 Neutral	$25.04B	3.23	-10.53%	4.39%	2.30%	-43.13%
CABO	56 Neutral	$1.43B	98.96	0.80%	4.70%	-5.87%	-93.49%

United States Cellular Corporate Events

UScellular Launches 2025 Annual Incentive Plan

UScellular has introduced its 2025 Annual Incentive Plan, approved by its Chair and CEO on January 13, 2025, which targets motivating its executives by aligning their performance with the company’s business goals. The plan emphasizes company performance, accounting for 80% of the evaluation, based on financial metrics like total service revenues and operating cash flow, while individual performance accounts for the remaining 20%.