Results: T-Mobile US, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for T-Mobile US, Inc. (NASDAQ:TMUS) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.8% to US$187. The result was positive overall - although revenues of US$20b were in line with what the analysts predicted, T-Mobile US surprised by delivering a statutory profit of US$2.49 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for T-Mobile US

Taking into account the latest results, the most recent consensus for T-Mobile US from 25 analysts is for revenues of US$80.8b in 2024. If met, it would imply an okay 2.1% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 14% to US$9.21. Before this earnings report, the analysts had been forecasting revenues of US$80.3b and earnings per share (EPS) of US$9.00 in 2024. So the consensus seems to have become somewhat more optimistic on T-Mobile US' earnings potential following these results.

The consensus price target was unchanged at US$203, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on T-Mobile US, with the most bullish analyst valuing it at US$250 and the most bearish at US$138 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that T-Mobile US' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.3% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 19 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.9% per year. Factoring in the forecast slowdown in growth, it looks like T-Mobile US is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards T-Mobile US following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$203, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for T-Mobile US going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with T-Mobile US , and understanding these should be part of your investment process.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com