T-Mobile: Growth Drivers Yet To Unfold, But The Stock Is Fairly Valued

Nov. 26, 2022 12:20 AM ETT-Mobile US, Inc. (TMUS)2 Comments
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Summary

  • Since our BUY call in December last year, the stock has gained over 25%, and it performed better than its peers.
  • The competition has intensified in the mobile market, as competitors are catching up with T-Mobile thanks to the C-band spectrum deployments, and new players enter the competitive landscape.
  • However, T-Mobile's 5G SA in the mid-band spectrum should improve its competitiveness in the consumer and enterprise markets. The mmWave spectrum could pave the way to the private wireless market.
  • Moreover, T-Mobile recently picked up more than 7,000 2.5GHz licenses, mostly in rural areas, that could help the company fill the coverage gaps and provide more capacity for FWA.
  • Yet, as the stock has reached our TP, we believe that it is fairly valued. It is trading at 9x of its forward EBITDA, higher than Verizon and AT&T.

T-Mobile Data Breach Affects 40 Million People

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Recap

T-Mobile’s (NASDAQ:TMUS) stock has shown resilience during inflationary pressures and rising interest rates - prompting a major sell-off in the equity market. The stock performed better than the company’s peers (see Figure 2) and hit our 12-month

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An independent research that aims to produce in-depth fundamental analysis accessible to all investors. For now, we will cover a group of stocks in within the same sector to provide investors with more comprehensive analysis. At times, however, we will write about companies with wide moats and sold at reasonable prices, those that fall out of favor but still retain a turnaround story, and smaller companies that are not well-known by the market but hold significant upside.

Disclosure: I/we have a beneficial long position in the shares of TMUS either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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