What Should You Know About T-Mobile US, Inc.’s (NASDAQ:TMUS) Future?
The most recent earnings release T-Mobile US, Inc.’s (NASDAQ:TMUS) announced in December 2018 showed that the business faced a significant headwind with earnings falling by -36%. Below, I’ve laid out key growth figures on how market analysts view T-Mobile US’s earnings growth outlook over the next few years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for T-Mobile US
Market analysts’ consensus outlook for next year seems positive, with earnings expanding by a robust 14%. This growth seems to continue into the following year with rates arriving at double digit 36% compared to today’s earnings, and finally hitting US$4.3b by 2022.
Although it is informative knowing the growth each year relative to today’s value, it may be more beneficial to analyze the rate at which the earnings are moving every year, on average. The pro of this technique is that it ignores near term flucuations and accounts for the overarching direction of T-Mobile US’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 14%. This means, we can assume T-Mobile US will grow its earnings by 14% every year for the next few years.
Next Steps:
For T-Mobile US, there are three essential aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is TMUS worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TMUS is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of TMUS? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
