T-Mobile is set to report its Q1 2024 results on April 25, with earnings expected to come in at $1.88 per share. This would mark a growth of about 18% versus the previous year, with revenue projected to stand at about $19.90 billion. The carrier has been seeing strong momentum with its postpaid business, adding a total of 934,000 postpaid phone customers in Q4 2023 and leading the industry in customer additions in 2023. T-Mobile’s early deployment of mid-band spectrum for 5G technology has given it an edge over rivals, offering a nice balance between speed and coverage. The company has also improved profitability through network integration and workforce reductions, and is expected to see further improvements in Q1 2024.
TMUS stock has seen gains of 20% over the past three years, but returns have been inconsistent, underperforming the S&P 500 in 2021 and 2023. Trefis High Quality Portfolio has outperformed the S&P 500 each year over the same period, indicating better returns with less risk for HQ Portfolio stocks. T-Mobile’s valuation on a price-to-earnings basis appears rich compared to its peers, trading at about 18x forward earnings, well ahead of AT&T and Verizon. However, the multiple is justified by T-Mobile’s emergence as one of the widest and best-performing networks, enabling faster growth and potential margin improvement through network closures.
T-Mobile’s focus on deploying mid-band spectrum for 5G technology has paid off, offering a balance between speed and coverage compared to rivals’ strategies. The company has also made inroads into the broadband market with fixed wireless broadband offerings, adding over 500,000 subscribers each quarter. T-Mobile’s free cash flow grew by 77% year-over-year in 2023 and is expected to increase further in 2024. The company’s valuation is projected at about $176 per share, ahead of the current market price, driven by potential growth and margin improvement opportunities.
Overall, T-Mobile’s Q1 2024 earnings are expected to show growth in both earnings and revenue, driven by strong postpaid customer additions and improvements in profitability. The company’s focus on mid-band spectrum deployment for 5G technology and expansion into the broadband market are key drivers of growth. While TMUS stock has seen gains over the past few years, returns have been inconsistent, underperforming the S&P 500 in some years. T-Mobile’s valuation appears rich compared to peers, but is justified by its emergence as one of the best-performing networks with growth potential and margin improvement opportunities. Investors will be watching T-Mobile’s Q1 2024 results closely for insights into the company’s performance and outlook moving forward.
