T-Mobile US, Inc. (NASDAQ:TMUS) delivered a strong quarter for customer growth by adding over a million new phone subscribers.
Despite significantly outperforming subscriber growth targets, T-Mobile’s latest earnings guidance is causing concern among investors who expected its strong customer momentum to translate into a more substantial financial forecast.
Analyst Take
Goldman Sachs analyst Michael Ng maintained a Buy rating on T-Mobile with a price forecast of $286.
Also Read: T-Mobile Raises Outlook, So Why Is Wall Street Selling?
Ng anticipates T-Mobile’s stock will trade lower following its third-quarter report.
The analyst argues that while the company delivered stronger-than-expected subscriber growth, this positive was offset by an earnings result that only met expectations and a guidance update that investors will likely view as disappointing.
He notes that investors have come to expect T-Mobile to surpass consensus estimates for both subscriber additions and core earnings (EBITDA), but the company only delivered on the former this quarter.
Ng thinks the market is highly focused on the competitive health of the wireless industry.
While rival AT&T recently noted that customer switching activity remains high—a trend that historically benefits T-Mobile—the financial guidance did not reflect the significant upside investors were hoping for.
Expectation Disconnect
Breaking down the results, the analyst commented that T-Mobile added over 1 million postpaid phone subscribers, significantly beating Wall Street’s forecast of around 828,000.
However, its core adjusted EBITDA of $8.68 billion was merely in line with consensus.
Looking at the updated 2025 forecast, Ng points out that while T-Mobile substantially raised its guidance for postpaid net customer additions, its revision for core adjusted EBITDA was only slight.
The analyst writes that investors expected a more significant increase, especially since the new forecast incorporates the recent US Cellular acquisition.
This disconnect between strong subscriber momentum and a modest earnings outlook is the primary reason Ng expects a negative stock reaction.
Price Action: T-Mobile US shares were down 4.16% at $217.84 at the time of publication on Thursday.
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