T-Mobile US, Inc. (TMUS): what the price requires
At today's price, T-Mobile US, Inc. (TMUS) is priced for -4.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/TMUS
Headline
| Field | Value |
|---|---|
| Ticker | TMUS |
| Company | T-Mobile US, Inc. |
| Sector / Industry | Communication Services / Telecom |
| Current price | $189.33/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 9.9% |
| Operating margin today | 21.9% |
| Margin compression implied | -12.0pp |
| Implied growth | -4.2% |
| Multiple paid | 17x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.4pp (computed at the 7% minimum rate; the CAPM rate 5.5% sits below it).
Reconcile: at the x-ray's 9.3% required return this reads ~11.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.16σ |
| cohort percentile (of 32 peers) | 44 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power 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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.83x | 5 | expensive |
| Earnings | 1.59x | 4 | expensive |
| Relative | 1.15x | 3 | expensive |
| Growth | 0.74x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.5%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $410.58 | 0.46x | yes | FCF base $19.1B, growth 9% (input: historical growth), terminal g 4.0%, WACC 8.5%, 6yr projection |
| DCF Exit Multiple | Growth | $255.11 | 0.74x | yes | Exit EV/EBITDA: 5.4x / 7.4x / 9.4x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $164.23 | 1.15x | yes | P/E 14.34x (blended: static sector reference 12x + trailing (TTM) 20x), scenarios: 12.0x / 14.3x / 16.7x (bear / base = reference held flat / bull), EV/EBITDA 7x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $103.42 | 1.83x | yes | BV/sh $50.70, ROE (TTM) 18.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $145.95 | 1.30x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $159.48 | 1.19x | yes | Rev $90.5B, growth 9% (input: historical growth; tapered), Terminal P/S: 1.9x / 2.3x / 2.7x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $82.12 | 2.31x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $13.76B × (1−25%) / WACC 8.5% → EPV (no growth) |
| Residual Income | Asset | $143.43 | 1.32x | yes | BV $50.70 + 5yr PV of (ROE (TTM) 18.9% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $103.61 | 1.83x | yes | √(22.5 × EPS $9.41 × BVPS $50.70) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $178.31 | 1.06x | yes | EBITDA $32.10B × sector EV/EBITDA 7.0x |
| FCF Yield | Earnings | $152.92 | 1.24x | yes | FCF $18198.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $144.56 | 1.31x | yes | SBC-adj FCF $17.35B (FCF $18.20B − SBC $0.85B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $7.89 | 24.00x | yes | EPS $9.41 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $23.89 | 7.93x | yes | BV $50.70 × (ROIC 4.0% / WACC 8.5%) |
| P/Sales Sector | Relative | $123.22 | 1.54x | yes | Revenue $90.53B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $101.73 | 1.86x | yes | EPS $9.41 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $87.2b |
| Net debt / NOPAT (after-tax) | 6.10x |
| Net debt / operating income (pre-tax) | 4.58x |
| Share count CAGR (buyback) | -3.2% |
| Burning cash | no |
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.)
- (no filing in the citation store)
- VZ (VERIZON COMMUNICATIONS INC)
- (no filing in the citation store)
- TIGO (MILLICOM INTERNATIONAL CELLULAR SA)
- (no filing in the citation store)
- TIMB (TIM S.A.)
- (no filing in the citation store)
- TLK (PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA TBK)
- (no filing in the citation store)
- KT (KT Corporation)
- (no filing in the citation store)
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.
- 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.
Sources
Q1 2026 earnings release, April 28, 2026 · TheStreet, July 1, 2026 · Q1 2026 earnings release; MarketBeat, July 2026 · HighSpeedInternet.com, 2026 · T-Mobile Newsroom; TheStreet, July 2026 · TheStreet, citing Financial Times and Reuters, July 1, 2026 · Q1 2026 earnings release; MarketBeat earnings calendar, July 2026 · TheStreet, citing Financial Times and Reuters, July 2026