TMUS T-Mobile US
Best-in-class carrier, but the price already assumes margin expansion and steady share gains.
The story
T-Mobile is the US wireless share-gainer, with a durable mid-band 5G spectrum lead, the lowest cost structure among the big three, and growing fixed-wireless broadband that is taking customers from cable. It is a mature oligopoly player whose growth comes from postpaid share gains, FWA, and fiber JVs, while margins rise as merger synergies finish, D&A falls, and AI-driven network and care efficiencies arrive. It is entering maturity, and returns come mainly from cash flow and buybacks rather than rapid growth.
Growth of 5% fading to 2.5% reflects share gains plus FWA and fiber in a saturated market. A 23.5% operating margin is justified by falling D&A (currently 14.4B against a much lower run-rate capex) and finished Sprint synergies, and it stays below peak-cycle levels. Sales-to-capital of 1.1 reflects incremental reinvestment, since the historical 0.63 is depressed by spectrum and merger goodwill already in the base, while a beta of 0.75 fits a defensive oligopoly carrying 80B of net debt.
Value drivers
| Revenue growth (Y1) | 5.0% |
| Terminal growth | 2.5% |
| Forecast horizon | 7y |
| Target operating margin | 23.5% |
| Years to target margin | 4 |
| Sales-to-capital | 1.10 |
| Beta | 0.75 |
| Failure probability | 1.0% |
| Cost of capital (WACC) | 7.9% |
| Terminal WACC | 8.7% |
Valuation bridge
| PV of explicit FCFF | 78.67B |
| PV of terminal value | 154.04B |
| Equity value | 150.51B |
| ÷ shares → per share | $140.31 |
News
neutral -0.10 · 8 articles
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Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 96.80B | 5.0% | 20.4% | 15.19B | 4.19B | 11.00B | 10.20B |
| 2 | 101.24B | 4.6% | 21.4% | 16.70B | 4.03B | 12.66B | 10.87B |
| 3 | 105.45B | 4.2% | 22.5% | 18.23B | 3.83B | 14.40B | 11.45B |
| 4 | 109.41B | 3.8% | 23.5% | 19.79B | 3.59B | 16.19B | 11.93B |
| 5 | 113.05B | 3.3% | 23.5% | 20.45B | 3.32B | 17.13B | 11.70B |
| 6 | 116.35B | 2.9% | 23.5% | 21.05B | 3.00B | 18.05B | 11.42B |
| 7 | 119.26B | 2.5% | 23.5% | 21.57B | 2.64B | 18.93B | 11.09B |
Key risks
- Price war as cable MVNOs and AT&T/Verizon push promotions, compressing ARPU and raising churn
- Spectrum auctions or fiber acquisitions requiring large capital outlays that lower returns
- High leverage (80B net debt) in a higher-for-longer rate environment
Catalysts
- FWA and fiber subscriber growth taking broadband share from cable
- AI-driven opex savings and D&A roll-off lifting margins and free cash flow per share via buybacks