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

Zacks Equity Research

T-Mobile (TMUS) closed the most recent trading day at $108.43, moving +1.19% from the previous trading session. This change outpaced the S&P 500's 2.59% loss on the day. Meanwhile, the Dow lost 2.72%, and the Nasdaq, a tech-heavy index, lost 2.19%.

Wall Street will be looking for positivity from TMUS as it approaches its next earnings report date. The company is expected to report EPS of $0.25, down 80.62% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $17.50 billion, up 59.4% from the year-ago period.

TMUS's full-year Zacks Consensus Estimates are calling for earnings of $1.37 per share and revenue of $69.20 billion. These results would represent year-over-year changes of -65.92% and +53.78%, respectively.

Investors might also notice recent changes to analyst estimates for TMUS. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. TMUS is currently a Zacks Rank #2 (Buy).

In terms of valuation, TMUS is currently trading at a Forward P/E ratio of 78.36. Its industry sports an average Forward P/E of 24.68, so we one might conclude that TMUS is trading at a premium comparatively.

We can also see that TMUS currently has a PEG ratio of 4.14. 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. Wireless National stocks are, on average, holding a PEG ratio of 2.91 based on yesterday's closing prices.

The Wireless National industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 39, which puts it in the top 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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