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Telephone & Data Systems (TDS) Gains But Lags Market: What You Should Know

Zacks Equity Research
·2 mins read

Telephone & Data Systems (TDS) closed at $19.05 in the latest trading session, marking a +0.63% move from the prior day. This move lagged the S&P 500's daily gain of 0.88%. Elsewhere, the Dow gained 0.57%, while the tech-heavy Nasdaq added 1.39%.

Heading into today, shares of the parent of U.S. Cellular and TDS Telecom had lost 13.01% over the past month, lagging the Utilities sector's gain of 6.1% and the S&P 500's gain of 3.54% in that time.

Investors will be hoping for strength from TDS as it approaches its next earnings release. In that report, analysts expect TDS to post earnings of $0.27 per share. This would mark year-over-year growth of 80%. Our most recent consensus estimate is calling for quarterly revenue of $1.30 billion, down 1.75% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.50 per share and revenue of $5.23 billion, which would represent changes of +45.63% and +1.07%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for TDS. 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. TDS is currently a Zacks Rank #3 (Hold).

Investors should also note TDS's current valuation metrics, including its Forward P/E ratio of 12.62. This represents a no noticeable deviation compared to its industry's average Forward P/E of 12.62.

The Wireline - National industry is part of the Utilities sector. This group has a Zacks Industry Rank of 128, putting it in the top 50% 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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