T-Mobile is expected to release its Q2 2024 results in late July, with analysts predicting earnings per share of $2.31, up 23% from last year, and revenue of about $19.6 billion. The company’s growth is anticipated to be driven by higher wireless services revenues, with a shift to 5G plans and steady customer growth. T-Mobile led the industry in postpaid phone net additions in Q1 2024, adding 532,000 new connections, thanks to its mid-band spectrum for 5G. The company’s recent price increases and premium plans are also expected to boost per-user revenues. Additionally, T-Mobile has been making strides in the broadband market, adding 405,000 subscribers in the last quarter.
The stock price of T-Mobile has risen by 35% from early 2021 to around $180, outperforming the S&P 500 over the same period. However, the stock’s performance has been inconsistent, with returns of -14% in 2021, 21% in 2022, and 15% in 2023. Despite this, T-Mobile has faced challenges beating the S&P 500 consistently, similar to other stocks in the Communication Services sector. In contrast, the Trefis High Quality Portfolio has outperformed the S&P 500 each year, providing better returns with less risk. It remains to be seen whether T-Mobile will face difficulties underperforming the S&P in the next 12 months.
T-Mobile’s valuation on a price-to-earnings basis seems high compared to its peers, trading at 18x forward earnings, while rivals AT&T and Verizon trade at higher single-digit multiples. However, analysts believe that this multiple is justified due to T-Mobile’s strong network coverage and potential for margin improvement. The company’s free cash flows are expected to grow in 2024, leading to a valuation of $177 per share, in line with the current market price. Analysts also highlight T-Mobile’s position as one of the best networks with wide and speedy coverage, which should enable it to grow faster than competitors.
The Trefis High Quality Portfolio, consisting of 30 stocks, has consistently outperformed the S&P 500, providing better returns with less risk. As the macroeconomic environment remains uncertain with high oil prices and elevated interest rates, T-Mobile’s performance in the next year is uncertain. However, analysts believe that the company’s growth potential and strong network coverage could drive further gains. T-Mobile’s focus on 5G plans, premium offerings, and broadband expansion are expected to contribute to its revenue growth and profitability.
Overall, T-Mobile’s Q2 2024 results are eagerly anticipated, with expectations of strong earnings and revenue growth driven by higher wireless services revenues and customer additions. The company’s stock price has shown significant gains over the past few years, outperforming the S&P 500 despite some fluctuations in returns. Analysts believe that T-Mobile’s valuation is justified by its network coverage and growth potential, projecting continued success in the market. Stay tuned for T-Mobile’s Q2 results for further insights into the company’s performance and future outlook in the telecom sector.
