Latest Developments:
T-Mobile (TMUS) posted $20.16 billion in revenues for Q3 2024, a 4.73% increase year-on-year. Margins improved significantly, with net income margin expanding to 15.17%. TMUS raised its FY2024 guidance, expecting 5.7 million net customer additions and strong adjusted EBITDA and free cash flow. With initiatives like fiber expansion and innovative 5G solutions, TMUS is poised for continued growth and aims to return $50 billion to shareholders by 2027.

Investment Case:
TMUS is capitalizing on industry tailwinds, with significant potential in broadband and 5G. The company’s 5% service revenue growth target through FY2027 suggests a strong future. Despite its impressive initiatives and the 50% YTD surge in share price, our valuation analysis suggests a 26% upside, making TMUS a compelling investment.

Valuation:
Our DCF model, based on conservative growth assumptions, values TMUS at $311.80, indicating a 26% upside. If margins improve further, the upside could rise to 41%.

Disclaimer: The above is an excerpt on a report written by our close associate, Selendis Research. Interested parties may check out the full report here on Seeking Alpha. All information provided is intended solely for general informational purposes. Seven Insights does not take into account individual financial goals or situations and does not provide personalized investment advice. Seven Insights is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank.