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T-Mobile (TMUS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, T-Mobile (TMUS) closed at $134.85, marking a +1.18% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.64%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.14%.

Prior to today's trading, shares of the wireless carrier had gained 0.11% over the past month. This has lagged the Computer and Technology sector's gain of 4.51% and the S&P 500's gain of 3.19% in that time.

TMUS will be looking to display strength as it nears its next earnings release. In that report, analysts expect TMUS to post earnings of $0.57 per share. This would mark a year-over-year decline of 34.48%. Meanwhile, our latest consensus estimate is calling for revenue of $19.88 billion, up 67.35% from the prior-year quarter.

TMUS's full-year Zacks Consensus Estimates are calling for earnings of $2.68 per share and revenue of $70.49 billion. These results would represent year-over-year changes of -33.33% and +56.65%, respectively.

Investors might also notice recent changes to analyst estimates for TMUS. These recent revisions tend to reflect the evolving nature of short-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. Within the past 30 days, our consensus EPS projection remained stagnant. TMUS is currently sporting a Zacks Rank of #2 (Buy).

Digging into valuation, TMUS currently has a Forward P/E ratio of 49.73. For comparison, its industry has an average Forward P/E of 14.48, which means TMUS is trading at a premium to the group.

It is also worth noting that TMUS currently has a PEG ratio of 2.68. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Wireless National was holding an average PEG ratio of 2.88 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 94, which puts it in the top 37% 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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