Reasonable Price-to-Earnings Ratio
Strong Price-to-Sales Ratio
Strong Return on Equity
High Gross Profit Margin
Strong Interest Coverage Ratio
Decent Free Cash Flow Per Share
🏆 Strong Customer Growth
📈 Leading Financial Performance
📶 5G Network Leadership
🚀 Ambitious Growth Targets
💻 Digital Transformation Progress
🌐 Expansion Opportunities
High Price-to-Free Cash Flow Ratio
Elevated EV/EBITDA Ratio
Moderate Net Profit Margin
Operating Profit Margin Needs Improvement
High Debt Levels
Low Liquidity Ratios
T-Mobile demonstrates a robust business model with a strong competitive position, evidenced by impressive customer growth and financial performance. Their future prospects appear promising with ambitious growth targets and ongoing digital transformation efforts.
Analysis Date: October 23, 2024
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$373.38
Current Market Price: $242.28
IV/P Ratio: 1.54x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
35.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for TMUS
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (25.58)
P/B ratio ≤ 1.5 (4.70)
Current ratio ≥ 2.0 (0.91x)
Long-term debt < Net current assets (-59.56x)
Margin of safety (35.0%)
TMUS does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
The return on equity stands at 18.09%, showing that TMUS efficiently utilizes shareholders' equity to generate profits.
A gross profit margin of 55.07% indicates strong efficiency in production and pricing power, contributing to overall profitability.
With a net profit margin of 13.93%, there is room for improvement in overall profitability, especially compared to industry leaders.
The operating profit margin at 22.27% suggests that while operations are profitable, there is potential for enhancing operational efficiency.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
18.09%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
1.43%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
55.07%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
13.93%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
An interest coverage ratio of 5.31 indicates that TMUS can easily cover its interest expenses, showcasing sound financial health.
Free cash flow per share at 8.54 supports the company's ability to invest in growth and pay dividends, contributing positively to financial flexibility.
The debt-to-equity ratio of 1.85 indicates significant leverage, which could pose risks in economic downturns.
Current and quick ratios below 1.0 suggest potential liquidity issues, indicating that TMUS may struggle to meet short-term obligations.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.85x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
0.91x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
T-Mobile achieved its best Q3 postpaid phone net adds in a decade, fueled by record low postpaid phone churn and continued year-over-year growth in gross adds. This demonstrates strong customer acquisition and retention capabilities.
The company reported industry-leading service revenue growth, with post-paid service revenue growth about twice that of peers, and a core adjusted EBITDA growth of 9%, leading the industry. This showcases strong profitability and effective cost management.
With the best 5G availability in the world, T-Mobile continues to extend its leadership in 5G technology, supported by recent technological advancements like four-way carrier aggregation. This positions them well against competitors.
T-Mobile raised its guidance for total postpaid customer net additions and postpaid phone customer net additions for 2024, indicating confidence in their growth trajectory. The company expects to reach 12 million broadband customers by 2028.
T-Mobile is making steady progress in digitalizing customer experiences, with a 40% increase in digital sales for iPhones year-over-year. This transformation is expected to enhance customer engagement and operational efficiency.
The company is capitalizing on underpenetrated markets and segments, particularly in rural areas, which represent significant growth potential. Their strong performance in broadband net adds also illustrates their capability to capture new customers.