GICS Sector : Communication Services
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.
T-Mobile reported a robust financial performance in Q3 2025, with actual EPS coming in at $2.59, beating estimates of $2.4. The company's postpaid service revenue grew 12% year-over-year, driven by its strong network leadership and customer-centric approach. Core adjusted EBITDA was up 6%, reflecting the company's ability to maintain its margin profile despite a competitive landscape. Revenue growth was also robust, setting the stage for a strong full-year performance. Analysts estimate next year's revenue growth at 6.9%, indicating a continued upward trajectory.
Publication Date: Oct -24
The company's operational performance was equally impressive, with over 1 million postpaid phone net additions and over 500,000 customer additions on 5G broadband. This growth was driven by T-Mobile's superior network, with Ookla data showing that its median download speeds on the new iPhone are nearly 90% faster than a benchmark competitor. The company's focus on digital transformation and customer acquisition strategies, including its T-Life app and eSIM technology, also contributed to its success.
T-Mobile raised its guidance for total postpaid net additions to 7.2-7.4 million and postpaid phone net additions to 3.3 million. Core adjusted EBITDA is expected to be $33.7-33.9 billion, with cash CapEx around $10 billion and adjusted free cash flow of $17.8-18 billion. The UScellular merger is expected to generate $1.2 billion in total OpEx and CapEx run rate synergies, with an accelerated timeline to realize these synergies within 2 years.
With a P/E Ratio of 20.47 and an EV/EBITDA of 11.13, T-Mobile's valuation appears reasonable given its growth prospects. The company's strong balance sheet and capabilities position it to maintain and extend its lead in the market for years to come. As Srini Gopalan takes over as CEO, investors will be watching to see how the company continues to execute on its strategy and drive long-term value creation. With a ROE of 19.42% and a Free Cash Flow Yield of 6.7%, T-Mobile appears well-positioned to deliver strong returns to shareholders.
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T-Mobile US, Inc.'s 4.0% growth is driven by increasing demand for 5G services, expanding customer base, and rising average revenue per user (ARPU). The company's aggressive network expansion and innovative offerings, such as unlimited data plans, have also contributed to its growth. Additionally, T-Mobile's merger with Sprint has enhanced its market position and competitiveness.
T-Mobile offers postpaid wireless services, including voice, data, and text messaging plans, to individual and business customers, providing a range of data plans, international coverage, and features like streaming perks and device financing.
T-Mobile's prepaid wireless services offer customers a no-contract option for voice, data, and text messaging plans, with various data allowances and add-on features like international coverage and data rollover.
T-Mobile's home internet services provide fast, reliable internet access to customers at home, using wireless technology to deliver high-speed internet to areas where traditional wired internet services are not available or are unreliable.
T-Mobile's mobile hotspot services allow customers to access the internet from anywhere, using a mobile hotspot device or a smartphone, providing a secure and reliable connection for multiple devices.
T-Mobile sells a wide range of devices, including smartphones, tablets, smartwatches, and other wireless devices, from top manufacturers like Apple, Samsung, and Google.
TVision is T-Mobile's streaming service, offering live TV, on-demand content, and cloud DVR capabilities, providing an alternative to traditional cable or satellite TV services.
T-Mobile's Magenta business services provide wireless solutions for businesses, including plans for voice, data, and text messaging, with features like mobile device management and security.
T-Mobile US, Inc. faces a moderate threat from substitutes as there are alternative wireless communication services such as satellite phones, internet-based communication services (e.g., Skype, WhatsApp), and other mobile virtual network operators (MVNOs). However, the convenience, widespread coverage, and reliability of traditional cellular services limit the appeal of substitutes.
The bargaining power of T-Mobile's customers is relatively low due to the large number of customers and the low switching costs between wireless carriers. While customers can choose from several major carriers, the differences in service offerings and pricing plans often make it difficult for individual customers to negotiate better deals.
T-Mobile US, Inc. has a large supplier base, including major equipment providers like Ericsson, Nokia, and Samsung. The company can negotiate favorable terms with its suppliers due to the large volume of purchases. Additionally, there are often multiple suppliers for similar components, which further reduces the bargaining power of individual suppliers.
The threat of new entrants in the US wireless carrier market is relatively low due to high capital requirements for network infrastructure, spectrum acquisition costs, and the need for a large customer base to achieve economies of scale. These barriers make it difficult for new companies to enter the market and compete effectively.
The intensity of rivalry among wireless carriers in the US is high. The market is dominated by a few major players (Verizon, AT&T, T-Mobile, and Sprint), leading to aggressive competition in terms of pricing, service offerings, and marketing. This competition drives innovation but also puts pressure on profit margins.
| Value | |
|---|---|
| Debt Weight | 64.86% |
| Debt Cost | 4.31% |
| Equity Weight | 35.14% |
| Equity Cost | 7.76% |
| WACC | 5.52% |
| Leverage | 184.55% |
Value: 7.1
Growth: 2.6
Quality: 5.7
Yield: 9.0
Momentum: 8.5
Volatility: 9.3
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Value: 7.0
Growth: 3.1
Quality: 5.5
Yield: 10.0
Momentum: 5.5
Volatility: 10.0
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Value: 8.4
Growth: 5.2
Quality: 8.0
Yield: 7.0
Momentum: 1.5
Volatility: 8.7
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Value: 1.8
Growth: 8.3
Quality: 8.4
Yield: 0.0
Momentum: 9.0
Volatility: 7.7
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Value: 4.2
Growth: 7.1
Quality: 5.6
Yield: 2.0
Momentum: 6.5
Volatility: 9.0
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Value: 7.6
Growth: 7.8
Quality: 5.2
Yield: 0.0
Momentum: 2.0
Volatility: 5.0
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