TMUS

Based on a comprehensive review, TMUS presents a cautious picture for investors.

Analysis Summary: From a technical standpoint, TMUS is in a deep correction phase, trading near its 52-week low and showing significant underperformance. While this suggests it is oversold and could see a technical rebound, the momentum is decidedly negative. Fundamentally, the company shows strong revenue but faces pressure on profitability margins and carries a highly leveraged balance sheet with potential liquidity concerns. The valuation is a primary concern; key metrics like the extremely high EV/EBITDA and negative PEG ratio indicate the stock is priced at a significant premium without the support of strong earnings growth.

Buy Recommendation: 📉 HOLD / APPROACH WITH CAUTION

While its low beta offers some defensive characteristics, TMUS currently appears overvalued relative to its growth prospects and faces fundamental headwinds. The significant price decline reflects these concerns. Investors should wait for clearer signs of margin stabilization and a more attractive valuation before considering a position. A better entry point may emerge if the current correction persists.

RockFlow Model Forecast: Three Scenarios for 2026

Of course. Here is a 12-month outlook for T-Mobile US (TMUS):

12-Month Outlook for TMUS:

The outlook is cautious, with a potential for stabilization rather than strong outperformance. Key catalysts will be the company's ability to translate its strong postpaid phone net additions into sustainable profit growth and demonstrate progress on its merger synergy targets. Major risks include intensifying competition pressuring pricing power, the burden of its significant debt load, and the possibility that its current valuation premium contracts if earnings growth fails to accelerate. Based on its current challenges, the stock is likely to trade range-bound, with a target price range centered roughly around current levels until fundamental improvements are visible.

* Disclaimer:** This analysis is for informational purposes only and does not constitute financial advice. Please consult with a qualified financial advisor before making any investment decisions.

Wall Street Consensus

Most Wall Street analysts are optimistic about TMUS's 12-month outlook, with consensus target around $192.02, indicating expected upside potential.

Overall, TMUS has investment potential but also faces challenges. Here are key factors to weigh before investing.

Of course. Here is the technical analysis of TMUS's price performance:

Overall Assessment

TMUS stock is in a pronounced correction phase, having declined significantly over the past three months and currently trading near its 52-week low.

Short-term Performance

The stock has shown negative momentum across both short-term periods, with a 3-month decline of -16.15% substantially worse than its 1-month drop of -2.9%. Its relative strength figure of -19.52% indicates it is significantly underperforming the broader market over this period, confirming the weakness is stock-specific rather than a general market downturn.

Current Position

TMUS is trading at $189.67, just $1.55 above its 52-week low of $188.12, placing it in deeply oversold territory within its annual range. With a maximum drawdown of -30.48% and a low beta of 0.44 suggesting it should be less volatile than the market, its current position indicates extreme bearish sentiment and potential for a technical rebound if investor perception shifts.

Of course. Here is a concise analysis of TMUS's fundamentals based on the provided data.

**Revenue & Profitability**

TMUS demonstrates strong revenue generation, with quarterly revenue exceeding $21 billion. However, profitability metrics show a significant shift between quarters. The Q3 gross profit margin contracted sharply to 49.3% from 65.1% in Q2, primarily due to a substantial increase in the cost of revenue. This pressured the operating income margin down to 22.1%. Despite this, the company maintained a solid net income margin of 12.4% in Q3.

**Financial Health**

The company's financial health is characterized by high leverage. The debt-to-equity ratio of approximately 2.0 indicates significant reliance on debt financing. The current ratio below 1.0 suggests potential liquidity constraints in covering short-term obligations with short-term assets. However, a reasonable interest coverage ratio of 5.65 shows that operating profits are sufficient to cover interest expenses.

**Operational Efficiency**

Operational efficiency presents a mixed picture. Return on Equity (ROE) is modest at 4.5%, reflecting less effective generation of profits from shareholder equity. The asset turnover ratio is low at 0.10, indicating that the company generates a relatively small amount of sales for its asset base, which is typical for capital-intensive telecom businesses. The cash conversion cycle of approximately 24 days points to efficient management of working capital.

TMUS Valuation Analysis

Valuation Level: TMUS's PE ratio appears bifurcated; its TTM PE of 17.87 is reasonable, but its forward PE of 24.78 suggests expectations for lower future earnings. The stock looks expensive on an asset basis with a high PB ratio of 3.51, though its PS ratio of 2.47 is more moderate. Critically, the extremely high EV/EBITDA of 49.49 and the negative PEG ratio of -1.68 signal significant overvaluation relative to its earnings growth and cash flow generation, indicating a premium price for stagnant or declining growth prospects.

Peer Comparison: Without specific industry average data, a precise comparative analysis is not possible. However, given the metrics presented, TMUS's valuation multiples would likely be elevated compared to a typical telecom or wireless carrier industry. The combination of a high forward PE, very high EV/EBITDA, and negative growth indicator (PEG) strongly suggests it is trading at a premium to its peers, making it appear overvalued in the broader market context without the support of strong growth.

Volatility Risk

TMUS demonstrates lower volatility risk compared to the broader market, as evidenced by its Beta of 0.44, indicating the stock is approximately 56% less volatile than the market. However, this lower beta does not fully protect against significant price declines, with the stock experiencing a substantial maximum drawdown of -30.48% over the past year. This drawdown highlights the potential for considerable losses despite the stock's generally lower volatility profile.

Other Risks

While TMUS benefits from the absence of notable short interest, suggesting limited bearish sentiment from professional investors, its risk profile is not without concerns. The primary risks likely stem from broader competitive and regulatory pressures within the telecommunications sector, which can impact profitability. Additionally, while specific liquidity metrics weren't provided, large-cap stocks like TMUS typically maintain adequate liquidity, though macroeconomic factors affecting capital-intensive industries remain a key consideration.