Is T-Mobile (TMUS) Undervalued After Its Recent Share Price Pullback? A Fresh Look at Valuation

T-Mobile US (TMUS) has been drifting lower lately, with the stock down about 8% over the past month and roughly 19% over the past 3 months, despite solid double digit earnings growth.

See our latest analysis for T-Mobile US.

That pullback comes after a strong multi year run where total shareholder return over three and five years remains firmly positive. This suggests momentum is fading near term as investors reassess how much of T-Mobile US’s growth is already priced in at a share price of $195.32.

If this shift in sentiment has you rethinking your exposure to telecom, it could be a good moment to explore fast growing stocks with high insider ownership as potential fresh ideas.

With shares now well below their highs but analysts still seeing sizable upside, investors face a key question: Is T-Mobile US quietly undervalued after this pullback, or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 29.5% Undervalued

With T-Mobile US last closing at $195.32 against a narrative fair value near $277, the current gap centers on how long its 5G lead can compound.

The analysts have a consensus price target of $272.299 for T-Mobile US based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $309.0, and the most bearish reporting a price target of just $200.0.

Read the complete narrative.

Want to see the math behind that valuation gap? The narrative leans on steadily rising revenues, fatter margins, and a future earnings multiple usually reserved for category leaders. Curious which specific growth and profitability assumptions have to materialize to justify that target, and how much optimism is reflected in today’s market price? Explore the details to unpack the full story driving this fair value.

Result: Fair Value of $277.08 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could unravel if escalating competitive promotions and higher handset tariffs squeeze margins and slow the momentum of T-Mobile US’s customer growth.

Find out about the key risks to this T-Mobile US narrative.

Another Lens On Value

While the narrative fair value flags T-Mobile US as meaningfully undervalued, a simple earnings based view is more cautious. At 18.4x earnings, the stock trades above its 16.6x fair ratio estimate and the 17.4x global wireless average, even if it is cheaper than peers at 29.8x. Is the growth story strong enough to justify paying this premium today?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own T-Mobile US Narrative

If you see things differently or prefer to dig into the numbers yourself, you can quickly build a customized view of T-Mobile US, Do it your way.

A great starting point for your T-Mobile US research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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