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On Thursday, Benchmark analysts maintained their Buy rating and $275.00 price target for T-Mobile US (NASDAQ:TMUS), expressing confidence in the company’s growth prospects. The stock, currently trading at $262.51, has delivered an impressive 64.32% return over the past year and sits near its 52-week high of $276.49. According to InvestingPro analysis, T-Mobile appears to be trading above its Fair Value, with 12 additional ProTips available to subscribers. The analysts highlighted T-Mobile’s strong position among customers switching carriers, which they believe will support the company’s continued growth in postpaid phone and overall postpaid units. This outlook remains positive despite a slowing economy and modest growth expectations for the top three mobile carriers. With a robust market capitalization of $299.7 billion and a healthy gross profit margin of 63.79%, T-Mobile maintains its position as a prominent player in the Wireless Telecommunication Services industry.
T-Mobile’s strategy of expanding beyond its initial 20% market penetration target into smaller markets, as well as business and government accounts, is seen as a key factor in its growth. The company’s performance in core urban markets, where it is reportedly gaining share among customers who prioritize network quality, also reinforces Benchmark’s confidence in T-Mobile’s guidance for 2025.
The analysts noted T-Mobile’s indication of approximately 3% growth in average revenue per account (ARPA) pricing, despite some negative publicity surrounding upcoming price increases. Starting April 2, 2025, T-Mobile plans to implement up to a $5 per line increase for subscribers on many legacy plans.
In addition to postpaid growth, T-Mobile is also focusing on other areas such as its prepaid Mint Mobile and Metro by T-Mobile brands, and the expansion of T-Mobile Home Internet. The latter is expected to benefit from the company’s excess network capacity, which is managed through a hex pin capacity model that takes into account usage intensity by market.
Benchmark’s analysis suggests that T-Mobile is well-positioned to maintain its growth trajectory, which will be further evaluated following the company’s first-quarter earnings release on April 24, 2025. The company’s financial health score is rated as GOOD by InvestingPro, with projected EPS of $10.69 for FY2025. Investors seeking detailed analysis can access T-Mobile’s comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities. The analysts have decided to defer any reconsideration of their valuation until that time, signaling their current satisfaction with T-Mobile’s market performance and strategic initiatives.
In other recent news, AT&T is reportedly considering the acquisition of Lumen Technologies’ fiber-to-the-home assets for over $5.5 billion. Analysts from TD Cowen suggest this purchase could be strategic for AT&T, potentially enhancing its market position in the wireless and wireline convergence space. If successful, the acquisition would add approximately 4.2 million homes to AT&T’s fiber network, aligning with its broader goal of reaching over 45 million fiber homes. Meanwhile, T-Mobile US, Inc. has announced a $3.5 billion senior notes offering through its subsidiary, T-Mobile USA, Inc. The proceeds from this offering are intended for general corporate purposes, which may include share buybacks and refinancing existing debt.
Additionally, T-Mobile has updated its executive compensation agreements, impacting restricted stock unit awards for key executives. In other developments, Verizon (NYSE:VZ) is facing competitive pressures, with its Chief Revenue Officer noting a challenging first quarter due to intensified competition in the telecommunications sector. Verizon has also observed a shift in consumer behavior with customers keeping their devices longer due to extended financing plans. These recent developments reflect ongoing strategic maneuvers by major telecommunications companies as they navigate market dynamics and competitive challenges.
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