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

T-Mobile US demonstrated robust financial growth, with a notable increase in Return on Capital (ROC) from 6.40% to 6.91% over the last twelve months, reflecting improved operational efficiency. The company's Net Sales Revenue rose by 7.30% year-over-year, reaching $85.85 billion, while Economic Profit surged by 27.86%, indicating strong profitability. Additionally, T-Mobile continued to excel in its broadband segment, adding 560,000 customers with a 34% year-over-year growth, further solidifying its market position in home internet and high-speed connectivity services.

T-Mobile US is currently trading at a FY26E EV/EBITDA multiple of 9.9x, representing its lowest valuation in over a year, which indicates increasing market skepticism about its future earnings potential. Significant weakness has been noted in both prepaid and wholesale revenue streams, alongside potential risks to revenue and cash flow generation stemming from economic and competitive pressures, as well as operational challenges related to merger expenses and higher cash taxes. Additionally, T-Mobile's strategic position is weakened due to its lack of Fiber offerings, making it difficult to compete in an increasingly converged market, with concerns about customer churn and declining average revenue per user (ARPU) contributing to a negative outlook.