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

T-Mobile US has demonstrated significant financial growth, with a Return on Capital (ROC) increasing from 6.40% to 6.91% over the last twelve months, and Core EBITDA rising 6.4% year-over-year to $8.3 billion, surpassing consensus estimates. The company also recorded a substantial increase in Net Sales Revenue, rising 7.30% year-over-year to $85.85 billion, alongside a notable Economic Profit growth of 27.86% year-over-year from $1.17 billion to $1.49 billion. Furthermore, the broadband segment showed robust performance with 560K net additions, including a remarkable 506K 5G broadband adds, while postpaid services revenue and overall service revenues grew by 12% and 9% year-over-year, respectively, highlighting T-Mobile's competitive positioning in the market.

T-Mobile US currently trades at a forward EV/EBITDA multiple of 9.9x, marking its lowest valuation in over a year, which raises concerns regarding investor confidence. Potential risks affecting its financial outlook include revenue and cash flow shortfalls attributed to economic, competitive, or operational challenges, which could significantly impact performance. Additionally, a downside scenario suggests a potential decline to a 5x EBITDA multiple, driven by increased churn, stagnant gross additions, lower average revenue per user (ARPU), and margin contraction.