T-Mobile US (TMUS) Stock Forecast & Price Target

T-Mobile US has demonstrated robust financial performance, as evidenced by a significant increase in Return on Capital (ROC) from 6.40% to 6.91% over the last twelve months, indicating improved efficiency in generating profits from invested capital. The company reported a 7.30% year-over-year increase in net sales revenue, rising from $80.01 billion to $85.85 billion, coupled with an impressive 27.86% growth in economic profit, which moved from $1.17 billion to $1.49 billion. Furthermore, T-Mobile's success in the broadband market is highlighted by a 34% year-over-year increase in net additions, contributing to an exceptional 12% increase in postpaid services revenue and a 9% increase in overall service revenues.

T-Mobile US is currently trading at an FY26E EV/EBITDA multiple of 9.9x, the lowest in over a year, reflecting investor concerns about the company's revenue generation capabilities. The firm is experiencing weakness in its prepaid and wholesale revenue, coupled with risks related to earnings per share and free cash flow guidance due to merger-related expenses and increased cash taxes. T-Mobile’s structural challenges in competing in a converged market, particularly its lag in fiber investments compared to peers, further contribute to its negative outlook, posing threats to its future growth prospects and market position.