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

Zacks Equity Research
·3 min read

T-Mobile (TMUS) closed at $132.23 in the latest trading session, marking a -0.02% move from the prior day. This change lagged the S&P 500's 0.08% gain on the day. At the same time, the Dow added 0.38%, and the tech-heavy Nasdaq lost 0.29%.

Prior to today's trading, shares of the wireless carrier had gained 3.27% over the past month. This has lagged the Computer and Technology sector's gain of 7.44% and the S&P 500's gain of 3.8% in that time.

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 $0.58, down 33.33% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $19.87 billion, up 67.28% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.68 per share and revenue of $70.49 billion. These totals would mark changes of -33.33% and +56.64%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 remained stagnant within the past month. TMUS currently has a Zacks Rank of #3 (Hold).

In terms of valuation, TMUS is currently trading at a Forward P/E ratio of 49.35. For comparison, its industry has an average Forward P/E of 14.22, which means TMUS is trading at a premium to the group.

It is also worth noting that TMUS currently has a PEG ratio of 2.66. 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 2.86 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 117, which puts it in the top 46% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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