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Is T-Mobile US a good buy opportunity at the current share price?

By:
on Dec 7, 2021
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  • T-Mobile US shares are advancing
  • T-Mobile US reported strong Q3 results
  • T-Mobile US trades at less than six times TTM EBITDA

T-Mobile US, Inc. (NASDAQ: TMUS) shares have advanced more than 6% since the beginning of December 2021, and the current price stands at $117.

The third-quarter earnings results showed that T-Mobile US is moving in the right direction, and the company’s management expects another strong quarter.

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Momentum remains strong

T-Mobile US is an American wireless network operator that has entered aggressively into the Home Internet segment, and it has plans to cover more than 50% of US households within six years.

The company’s business has proven improvements throughout the third fiscal quarter, and T-Mobile US reported strong results in November.

Total revenue has increased by 1.7% Y/Y to $19.6 billion, while the GAAP EPS was $0.55 (beats by $0.02).

Net cash provided by operating activities has increased 25% compared with the third quarter of 2020 and reached $3.5 billion.

Free cash flow has increased more than for times Y/Y to $1.6 billion, and it is important to mention that T-Mobile US reported record-high core adjusted EBITDA of $6.0 billion for the third quarter.

The company’s management revised financial guidance for the full fiscal year and expects core adjusted EBITDA to be in a range between $23.4 billion – $23.5 billion.

The third-quarter earnings results showed that T-Mobile US is moving in the right direction, and according to CEO Michael Sievert,  T-Mobile provides the best value proposition, with truly unlimited plans, fairly priced on the best 5G network, and with award-winning service.

CEO Michael Sievert said that AT&T and Verizon are running expensive promotions for 5G devices, and every time they upgrade a customer from a 4G device to a 5G device, they’re spending a fortune to do it. CEO Michael Sievert added:

At T-Mobile, those devices work demonstrably better, with ultra capacity 5G reaching more than half the country today, rocking speeds of 400 megabits per second on average. Every one of those competitive customers being upgraded to 5G, at great expense, is a potential future T-Mobile customer.

T-Mobile US has doubled the number of postpaid net new accounts in the third quarter of 2021 compared with the third quarter of 2020 and reached the highest Q3 account growth in seven years. T-Mobile US  expects to cover 300 million people in the US, with ultra capacity 5G, by the end of 2023.

T-Mobile US trades at less than six times TTM EBITDA, the company is expanding its market share, and with a market capitalization of $140.8 billion, shares of this company are fairly valued.

Bulls control the price action for now

Data source: tradingview.com

T-Mobile US shares advanced more than 6% since the beginning of December 2021, and according to technical analysis, the bulls remain in control of the price action for now.

Rising above $120 supports the positive trend, and the next price target could be around $125.

Summary

T-Mobile US shares advanced more than 6% since the beginning of December 2021, and according to technical analysis, the bulls remain in control of the price action for now. T-Mobile US is moving in the right direction, and the company expects to cover 300 million people in the US, with ultra capacity 5G by the end of 2023.

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