T-Mobile US, Inc. (TMUS): what the price assumes

In the published model solve dated 2026-Q2, anchored at $181.00, T-Mobile US, Inc. (TMUS) is priced for -3.6% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/TMUS

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 5.3% sits below it).

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• T-Mobile is the growth engine in a no-growth industry, serving what its FY2025 10-K counts as "142.4 million postpaid and prepaid customers" while guiding 2026 service revenue up 8% to roughly $77 billion, a pace neither AT&T nor Verizon approaches.
• The new risk is aimed at the moat itself: reports in late June 2026 that SpaceX plans a direct retail Starlink mobile service knocked the stock to a 52-week low of $165.66 on June 30, a reminder that the network advantage justifying the premium multiple now has a satellite-shaped question mark over it.
• Watch the July 23 second-quarter report, guided to about $19 billion of service revenue and $9.4 billion of core adjusted EBITDA, plus the pace of the fiber build after the Metronet and Lumos deals.

Bull Case

Telecom is usually a valuation exercise in managed decline: enormous capital costs, saturated markets, and pricing power that erodes one promotion at a time, which is why the sector trades at 12 times earnings. The interesting thing about T-Mobile is that it keeps breaking the pattern the sector multiple assumes. First-quarter 2026 postpaid net account additions of 217,000 grew 6% year over year, average revenue per account rose 3.9% to $151.93, and management raised full-year guidance to 950,000 to 1.05 million postpaid net account additions with service revenue up roughly 8%. AT&T and Verizon, per their own 10-Ks, run bigger revenue bases ($125.6B and $138.2B respectively) but carry legacy wireline businesses; T-Mobile is the one taking share.

The share-taking rests on an asset that took a decade to assemble. The filing describes a "foundational layer of low-band, mid-band and millimeter-wave (\"mmWave\") spectrum licenses" whose "multilayer portfolio of spectrum broadens and deepens our nationwide 5G network" (FY2025 10-K, accession 0001283699-26-000010). On top of it the company has stacked adjacencies: the UScellular wireless business folded in during 2025 (the 10-K details the acquisition, including $1.7 billion of assumed debt at fair value), a fiber footprint expanding through the Lumos and Metronet transactions that reaches over 2.6 million homes and businesses across 19 states, and T-Satellite with Starlink, launched July 2025 on 650 low-Earth-orbit satellites covering more than 500,000 square miles beyond tower reach.

The cash economics have caught up with the story. Trailing free cash flow of $18.20B puts the free cash flow yield at 8.8%, unusually rich for a business still growing service revenue at 8%, and the company converted that into $16.54B of capital returns over the past year: $12.31B of buybacks plus $4.24B of dividends, with the payout ratio a comfortable 42.6% of net income. Return on equity runs at 18.9% against AT&T's and Verizon's larger but slower franchises. The bull case is that the market is still pricing T-Mobile with sector-of-decline instincts while the operating machine compounds accounts, revenue per account, and now fiber and satellite coverage on top.

Bear Case

The moat T-Mobile spent a decade digging is the 5G network lead, and the erosion is now visible from two directions at once. The first is from orbit. In late June 2026, reports that SpaceX intends to launch a direct retail mobile service under the Starlink brand sent the stock to a 52-week low of $165.66 on June 30. The awkwardness is structural: T-Mobile's own satellite offering runs on Starlink hardware, so its partner holds the keys to the capability it markets as differentiation. The company's filing already frames the treadmill in its own words: competitors "may seek to differentiate through marketing, brand positioning, or third-party recognition as leaders in network performance, coverage, or reliability" and the eventual "transition to 6G, may redefine network standards and increase customer expectations" (FY2025 10-K, accession 0001283699-26-000010).

The second erosion is the price of staying ahead. The 10-K concedes the company "will continue to actively seek to make additional investments in new spectrum, which could be significant" and that it "may be unable to secure the additional spectrum necessary". Spectrum auctions, a UScellular integration, and a multi-state fiber build all draw on the same wallet that currently funds $12.31B of annual buybacks; if the competitive response to satellite entrants and to AT&T and Verizon's convergence bundles requires more capital, the buyback is the swing line. Verizon runs a 21.2% operating margin and AT&T 19.2% on much larger revenue bases (each per its own 10-K), and both have shown they will spend on promotions to stop share loss.

What the price asks of all this is mild, which is precisely why the multiple is the exposure. The market pays about 17 times company-wide operating income, a premium to the telecom pack: 19.6x trailing earnings against a 12x sector median. The asset-value and earnings-power methods already read the price as 1.5x to 1.7x above what demonstrated profitability supports; the price holds together only on the multiple-and-growth frames. A carrier that stops out-growing the industry gets repriced to the industry, and the June satellite scare was a preview of how quickly that repricing conversation can start.

Valuation

The undemanding part first: at $187.58 (July 11, 2026), the price embeds company-wide operating income shrinking roughly 4.3% a year for five years. The market is paying about 17 times operating income, but under the framework's discount assumptions that multiple is consistent with modest decline, not heroic growth, and the near-term pace it implies is well within what the company has recently delivered. On a second, separately derived read, the operating margin the price requires long-term sits far below the roughly 19.9% the business earns today. Both reads say the same thing: nobody is paying for a miracle here.

The method families split cleanly along the growth axis. The forward-growth methods land above the price, reading it at about 0.7x their central estimate, and peer multiples roughly justify it at 1.1x, helped by EV/EBITDA of 7.3x sitting essentially on the 7x sector median. The static frames disagree: asset-based methods read the price at 1.7x their mark and earnings-power methods at 1.5x, because a business built on $90.53B of revenue at an 11.7% net margin does not, without growth credit, support a $206.72B market capitalization. The disagreement is the telecom question in miniature: on trailing GAAP earnings the stock costs 19.6x against a 12x sector median, a premium earned only if the share gains continue. The demonstrated base is unusually strong for the sector: $32.10B of EBITDA, $18.20B of free cash flow (an 8.8% yield on the equity), positive free cash flow in all four trailing quarters, and leverage that is moderate and well covered.

Capital return is the residual claim on all of it: $12.31B of trailing buybacks, 116.7% of net income, alongside a dividend at an annualized $4.08 per share declared rate, a 2.2% yield. The filing's operating scale, "142.4 million postpaid and prepaid customers" as of December 31, 2025 (FY2025 10-K, accession 0001283699-26-000010), is what those flows are built on. The decisive fact for the price is that the growth-dependent frames already clear it; the bet is not that T-Mobile accelerates, only that it does not become an ordinary telecom.

Catalysts

The second-quarter report lands July 23, 2026, at 6:30 AM Eastern, with management having guided to approximately $19 billion of service revenue, up 9% year over year, and core adjusted EBITDA of about $9.4 billion, up 10%. The full-year frame it feeds: 950,000 to 1.05 million postpaid net account additions and roughly $77 billion of service revenue, both raised after a first quarter that delivered 217,000 postpaid net account additions and average revenue per account up 3.9% to $151.93.

The satellite storyline runs on its own calendar. T-Satellite with Starlink has been live since July 2025 and keeps expanding capability, with app support quietly growing. The unresolved question is SpaceX's reported plan to sell retail mobile service directly under the Starlink brand, the June 30 report that drove the stock to its 52-week low; any concrete launch details, pricing, or spectrum arrangements will move the whole carrier group, T-Mobile most of all given its partnership exposure.

The fiber build is the third watch item: following the Lumos deal and the joint Metronet purchase with KKR, T-Mobile's fiber footprint spans more than 300 communities in 19 states passing over 2.6 million homes and businesses. Disclosure on fiber subscriber uptake, UScellular integration costs (the 10-K carries the acquisition accounting, including $1.7 billion of assumed debt at fair value), and any commentary on spectrum purchases will show whether the capital-return pace of the past year, $16.54B between buybacks and dividends, is sustainable alongside the expansion agenda.

Peer Cohorts (Per Segment, With Filing Citations)

Wireless (single segment) (reported)

• T (AT&T INC.)
• FY2025 10-K: …multiple licensees, who provide wireless services on the cellular, PCS, Advanced Wireless Services, 700 MHz and other spectrum bands, may operate in each of our U.S. service areas. Our competitors include two national wireless providers; a larger number of regional providers and resellers of each of those providers'…
• FY2025 10-K: …As of December 31, 2025, we served 120 million Mobility subscribers, including 91 million postpaid (74 million phone), 18 million prepaid and 11 million through resellers. Our Mobility business unit revenue includes the following categories: service and equipment. Service We offer a comprehensive range of…
• VZ (VERIZON COMMUNICATIONS INC)
• FY2025 10-K: …Analysis of Financial Condition and Results of Operations - Overview" and "- Segment Results of Operations" and in Note 13 to the consolidated financial statements included in this Annual Report. Service and Product Offerings Wireless Services and Equipment We provide a wide variety of wireless services to Consumer…
• FY2025 10-K: …fourth-generation (4G) Long-Term Evolution (LTE) networks as an alternative to traditional landline internet access. In 2025, the Consumer segment's revenues were $106.8 billion, representing approximately 77% of Verizon's consolidated revenues. As of December 31, 2025, Consumer had approximately 116 million wireless…
• TIGO (MILLICOM INTERNATIONAL CELLULAR SA)
• FY2025 20-F: …- MFS) and its fixed and other services, as well as related devices and equipment. Recurring revenue consists of monthly subscription fees, airtime and data usage fees, interconnection fees, roaming fees, TV services, B2B contracts, MFS commissions and fees from other telecommunications services such as data…
• FY2025 20-F: …Principal-Agent, some arrangements involve two or more unrelated parties that contribute to providing a specified good or service to a customer. In these instances, the Group determines whether it has promised to provide the specified good or service itself (as a principal) or to arrange for those specified goods or…
• TIMB (TIM S.A.)
• FY2025 20-F: …provide comparable service in capacity and quality to locations far from large centers, thus boosting investments in IP backbone and datacenters. In addition, competitive pressures in the residential fixed ultra-broadband market may further intensify due to the expansion of alternative access technologies, including…
• FY2025 20-F: …capabilities and continued investment in brand perception. Combined, these initiatives support our ambition to enhance the distinctiveness of our mobile value proposition, protect and grow our customer base, and unlock new avenues of profitable growth. To pursue sustainable and profitable growth in the broadband…
• TLK (PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK)
• FY2025 20-F: …the historical information and customer trends and updates the evaluation on an annual basis. iii. Interconnection Revenue from interconnection is mainly comprises of interconnections service or other telecommunications carriers' subscriber calls to the Group's subscribers (incoming call), calls between other…
• FY2025 20-F: …optimal service quality and efficiency. SFU Single Family Unit, a fiber-optic network solution or device designed specifically to provide broadband services to individual, standalone residential homes. SIM Card Subscriber Identity Module card, a microchip in a mobile phone that connects it to a particular phone…
• KT (KT Corporation)
• FY2025 20-F: …individual, household and corporate customers as well as selling handsets; 41 Table of Contents • the finance segment, which engages in providing various financial services such as credit card services and value-added network and payment gateway services; • the satellite TV segment, which engages in satellite TV…
• FY2025 20-F: …among Tving / Netflix / YouTube Premium / Disney / Samsung / Electronics Subscription) 5G Basic ₩80,000 Unlimited 300 min. Unlimited • Unlimited data roaming at 100 kbps 5G Simple 110 GB ₩69,000 Unlimited 300 min. Unlimited, but decelerate to 5 Mbps after 110 GB 5G Simple 90 GB ₩67,000 Unlimited 300 min. Unlimited,…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.