T-Mobile’s Stock Soars Following Impressive Q3 Financial Results

Headquartered in Bellevue, Washington, T-Mobile US, Inc. (TMUS) stands out as a key player in the telecommunications sector. With a market cap of $279.5 billion, the company focuses on delivering top-notch wireless services across the United States. T-Mobile is celebrated for its cutting-edge approach, providing extensive 5G coverage and excellent customer service that connects millions of customers nationwide.

T-Mobile Stock Exceeds Market Growth

Over the last year, T-Mobile’s shares have substantially outpaced the overall market. Specifically, the stock has gained 63.6%, while the broader S&P 500 Index ($SPX) has seen a rise of nearly 35.7%. In 2024, TMUS stock has jumped 50.2%, notably higher than the SPX, which has reported a 25.5% increase year-to-date.

When comparing T-Mobile’s performance to the Communication Services Select Sector SPDR ETF Fund (XLC), the contrast is striking. The ETF has gained about 42.3% during the same period. T-Mobile’s year-to-date returns also exceed the ETF’s 33.8% increase.

Strong Q3 Results Propelled Stock Increase

On Oct. 23, T-Mobile’s shares jumped over 4% following a positive announcement about its Q3 performance. Service revenues climbed to $16.7 billion, a 5% rise from the previous year. Furthermore, postpaid service revenues increased by 8%, reaching $13.3 billion.

The company reported a net income of $3.1 billion and earnings per share (EPS) of $2.61, which are both up 43% year-over-year. Core adjusted EBITDA rose by 9% to $8.2 billion. T-Mobile achieved record net cash from operating activities at $6.1 billion, reflecting a 16% year-over-year increase, along with adjusted free cash flow of $5.2 billion, a 29% rise.

Positive Outlook and Analyst Ratings

For the fiscal year ending in December, analysts predict T-Mobile’s EPS to grow by 32%, reaching $9.15 on a diluted basis. The company has surpassed earnings estimates in three out of the last four quarters.

Among 27 analysts covering TMUS stock, the consensus rating is a “Strong Buy,” which is based on 19 “Strong Buy” ratings, three “Moderate Buys,” four “Holds,” and one “Strong Sell.”

These ratings have remained steady over the past month.

Price Target Adjustments from Morgan Stanley

On Oct. 29, Morgan Stanley (MS) increased T-Mobile’s price target from $209 to $239, maintaining an “Overweight” rating in light of the strong Q3 results and favorable projections.

The average price target of $241.54 represents a slight premium compared to TMUS’s current stock price. The highest target on Wall Street is set at $271, indicating potential growth of 12.5%.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.