Is TMUS a good stock to buy?

T-Mobile stock has risen about 2% so far in 2023. In the midst of a bear market, TMUS stock outperformed the S&P 500 in 2022. T-Mobile stock increased by about 21%, while the S&P 500 sank by more than 19%.

About TMUS

T-Mobile US, Inc. provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands through its flagship brands, T-Mobile and Metro by T-Mobile. The Corporation principally provides mobile communications services via its fourth generation (4G) long term evolution network and fifth generation (5G) technology network. It also sells wireless products, such as handsets, tablets, and other mobile communication devices, as well as accessories, and provides financing through equipment installment plans and leasing through JUMP! On Demand. The company’s principal service package includes the trademark Magenta plan, which provides unlimited talk, text, and smartphone data on its network, as well as free 5G connectivity.

T-Mobile Financial Performance

T-Mobile earned $1.18 per share in the December quarter, up from 34 cents the previous year. This surpassed the consensus forecast of $1.07 per share. 

Sales dipped 2.5% to $20.27 billion, falling short of analysts’ forecast of $20.64 billion. 

Service revenue increased 3.7% to $15.5 billion, as expected. Lower lease activity and slower device sales as fewer postpaid customers upgraded drove a 19% drop in equipment sales. 

The average revenue per postpaid phone customer increased 1.6% to $48.86. 

T-Mobile expects free cash flow of $13.1 billion to $13.6 billion in 2023, which is somewhat lower than its previous forecast. 

T-Mobile attracted 524,000 home broadband subscribers, the majority of whom used its 5G network. This fell short of forecasts of 555,000 home broadband subscribers.

Additionally, T-Mobile continues to offer 5G fixed internet services to residential users, taking on cable TV companies. By 2025, it hopes to have 7 million to 8 million fixed broadband customers. 

On August 16, T-Mobile released a 5G Home Internet Lite service. The service will have a 100 GB per month data cap for $50. It will be available over T-full Mobile’s wireless footprint, including locations where the company does not have the surplus capacity to offer its unlimited fixed internet service. 

One advantage for TMUS stock is that management is always innovating. T-Mobile announced a collaboration with Elon Musk’s SpaceX broadband satellite service in August. The two firms will deliver cellular connectivity to unserved “dead spots” in rural America.

The service could be ready for testing by the end of 2023. The suggested service will work with the great majority of current cellphones. Consumers would have to purchase a satellite dish separately. 

T-Mobile and Dish Network (DISH) signed a binding term sheet in June 2022 to alter a master network services agreement signed in 2020. T-Mobile will transfer to Dish over 100,000 Boost-branded customers from former Sprint affiliates. T-Mobile also intends to improve its in-market roaming services. Dish will give $3.3 billion in revenue commitments over the course of the agreement in exchange.

TMUS Stock Evaluation

T-Mobile stock has a Relative Strength Rating of 71 out of a maximum possible score of 99. The top stocks typically have an RS Rating of at least 80. 

Furthermore, TMUS stock has a Composite Rating of 67 out of a possible 99.

The Accumulation/Distribution Rating of TMUS is D-minus. This grade takes into account price and volume movements in a stock over the last 13 weeks of trading. The grading, which ranges from A+ to E, assesses institutional purchasing and selling in a company. A+ denotes heavy institutional buying, whereas E denotes heavy selling. Consider a C grade to be neutral. 

T-Mobile stock has a weekly purchase point of 154.48 as of March 8. TMUS stock is currently trading roughly 8% below its entry point.

Conclusion

It’s crucial to remember that investing in stocks always involves some risk, and the market is prone to volatility and uncertainty. As a result, before making any investing decisions, it is critical to conduct extensive research and contact with a financial counselor. 

Overall, based on TMUS’s present financial performance and growth potential, it may be a solid company to buy for long-term investors ready to accept some risk.

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