Raymond James On T-Mobile's Q4: Focus On The Carrier's 'Game Plan'
T-Mobile US Inc (NASDAQ: TMUS) reported fourth-quarter results that came in ahead of Wall Street's estimates, but the company's 2018 outlook may have disappointed some investors.
The Analyst
Raymond James' Ric Prentiss maintains an Outperform rating on T-Mobile's stock.
The Thesis
T-Mobile's Q4 results were in-line to slightly better than expected, Prentiss said in a Thursday note. (See the analyst's track record here.)
Some of T-Mobile's metrics include:
Seven-percent growth in service revenue to $7.757 billion.
Postpaid phone average revenue per user of $46.38, which was impacted by the 2017 hurricane season.
Adjusted EBITDA of $2.711 billion — $2.596 billion excluding the hurricane impact — exceeded estimates of $2.479 billion.
Looking forward, T-Mobile's 2018 branded postpaid net additions figure of 2 to 3 million is 14-percent below the 2.9-million midpoint Prentiss was modeling. But it's important for investors to keep in mind T-Mobile's "game plan," which resulted in the company beating the initial midpoint of postpaid net add guidance by 40 percent in 2016 and 25 percent in 2017 while simultaneously achieving its EBITDA guidance in both years, Prentiss said.
T-Mobile said that it expects to see an effective tax rate of 24 to 25 percent in 2018 due to the recently passed tax reform. The wireless carrier does not expect to be a "meaningful" cash taxpayer until 2024, an adjustment from an earlier projection of 2020, according to Raymond James.
Price Action
Related Links:
Shots Fired! T-Mobile CEO Takes Wireless Wars To Twitter
T-Mobile: From Turnaround Story To Industry Powerhouse
Photo by Coolcaesar/Wikimedia.
Latest Ratings for TMUS
Dec 2017 | Macquarie | Upgrades | Neutral | Outperform |
Dec 2017 | Morgan Stanley | Maintains | Overweight | |
Nov 2017 | Moffett Nathanson | Upgrades | Neutral | Buy |
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