T-Mobile's Prospects: Is it the Right Time to Buy TMUS Stock?

Published by

June 12, 2023 2:15 PM

Published -June 9th, 2023 @ 1:30 PM (GMT+2 )

T-Mobile's 2022 Performance and 2023 Prospects

The wireless industry powerhouse, T-Mobile US (NASDAQ:TMUS), surged into the limelight with a 20% increase in stock price in 2022, outpacing the S&P 500, which dropped around 20%.

The successful acquisition of Sprint in 2020 propelled this growth, buttressing the company's robust subscriber base and setting an optimistic trajectory for its 5G strategies.

T-Mobile's Share Buyback and 5G Growth Strategy

The underlying growth prospects remain compelling despite a 5% decline in T-Mobile's stock year to date in 2023 compared to a 10% increase for the S&P 500. The synergies from the Sprint merger and the company's share buyback strategy remain key drivers for potential growth. Notably, T-Mobile's 5G spectrum advantage could be a catalyst for market share gains.

T-Mobile has been actively repurchasing its own stock. It bought back $4.8 billion of its stock in the March quarter and has a long-term goal of up to $60 billion in share repurchases. The company's 5G network build-out is another key factor, with the addition of 2 million 5G fixed broadband subscribers in 2022, up from 546,000 the previous year. The goal is to sign up 7 to 8 million 5G fixed broadband subscribers by 2025.

Acquisition of Mint Mobile and Analysts' Take

Notably, T-Mobile acquired prepaid wireless service provider Mint Mobile in mid-March for $1.35 billion in cash and stock, tapping into Mint's direct-to-consumer, online-only sales platform, which appeals to Gen Z and Millennial customers.

On the analyst front, Wolfe Research upgraded TMUS stock, citing "bright" prospects for intrinsic value growth per share, even after a 7.6% decline in shares year to date. Moffett Nathanson maintained a Market Perform rating, albeit lowering their price target.

T-Mobile's strong 5G capabilities are also evident in its recent partnership with Valmont, a critical infrastructure and agricultural product developer. Together, they achieved an industry-first 77-mile 5G-enabled drone flight inspection, emphasizing T-Mobile's network's reliability in remote areas.

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5G Innovation and Investment Appeal

Despite a short-term slump, T-Mobile's long-term prospects hinged on 5G network growth, market share expansion, and a resilient business model, make it an appealing investment opportunity.

Nevertheless, stock investments necessitate comprehensive research, scrutiny, and a long-term investment perspective. As with all investments, it's crucial to contemplate your investment objectives and risk tolerance before making any investment decisions. Past performance does not indicate future results. This piece is purely informational and should not be interpreted as investment advice from MEXEM.


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