Valued at a market cap of $268.9 billion, T-Mobile US, Inc. (TMUS) is a wireless communications services provider headquartered in Bellevue, Washington. It provides voice, messaging, and data services to consumer and business customers and also sells wireless devices, including smartphones, wearables, and home broadband routers.
Shares of the telecom giant have surged past the broader market over the past 52 weeks. TMUS stock has rallied 27.9% over this time frame, while the broader S&P 500 Index ($SPX) has gained 21.5%. Moreover, on a YTD basis, TMUS is up 8.3%, compared to SPX’s 7.1% return.
However, narrowing the focus, TMUS has lagged behind the iShares U.S. Telecommunications ETF’s (IYZ) 36.4% uptick over the past 52 weeks and 10.6% rise on a YTD basis.
On Jul. 23, TMUS delivered better-than-expected Q2 results, prompting its shares to surge 5.8% in the following trading session. The company reported record Q2 total postpaid and postpaid phone net and gross customer additions, along with industry-leading gains in postpaid net account additions and 5G broadband subscribers. This contributed to a robust 6.9% year-over-year growth in its overall revenue, which reached $21.1 billion, surpassing the consensus estimates by a slight margin. Moreover, its core adjusted EBITDA improved 6.4% from the year-ago quarter, reaching $8.5 billion, while its EPS advanced 14.1% annually to $2.84, topping analyst estimates by 5.6%.
Additionally, TMUS raised its fiscal 2025 outlook, and now expects postpaid net customer additions in the range of 6.1 million to 6.4 million, and projects core adjusted EBITDA to be between $33.3 billion and $33.7 billion.
For the current fiscal year, ending in December, analysts expect TMUS’ EPS to grow 9.6% year over year to $10.59. The company’s earnings surprise history is promising. It surpassed the consensus estimates in each of the last four quarters.
Among the 28 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on 16 “Strong Buy,” two "Moderate Buy,” nine “Hold,” and one “Strong Sell” rating.
This configuration is slightly more bullish than a month ago, with 15 analysts suggesting a “Strong Buy” rating.
On Jul. 25, RBC Capital analyst Jonathan Atkin maintained a "Sector Perform" rating on TMUS and raised its price target to $270, indicating a 13% potential upside from the current levels.
The mean price target of $271.55 represents a 13.7% premium from TMUS’ current price levels, while the Street-high price target of $309 suggests an ambitious upside potential of 29.3%.
