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T-Mobile (TMUS) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 mins read

T-Mobile (TMUS) closed the most recent trading day at $121.57, moving +1.25% from the previous trading session. This change outpaced the S&P 500's 0.63% loss on the day. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the wireless carrier had gained 6.95% in the past month. In that same time, the Computer and Technology sector gained 8.45%, while the S&P 500 gained 5.91%.

Investors will be hoping for strength from TMUS as it approaches its next earnings release. The company is expected to report EPS of $0.54, down 53.45% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $18.20 billion, up 64.57% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.91 per share and revenue of $68.19 billion. These totals would mark changes of -52.49% and +51.53%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for TMUS. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.62% higher within the past month. TMUS is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, TMUS currently has a Forward P/E ratio of 62.8. This represents a premium compared to its industry's average Forward P/E of 24.46.

Also, we should mention that TMUS has a PEG ratio of 4.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Wireless National was holding an average PEG ratio of 4.23 at yesterday's closing price.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 118, which puts it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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