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. T-Mobile US reported US$20b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.49 beat expectations, being 9.6% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from T-Mobile US' 25 analysts is for revenues of US$80.8b in 2024. This would reflect a modest 2.1% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 14% to US$9.21. In the lead-up to this report, the analysts had been modelling revenues of US$80.3b and earnings per share (EPS) of US$9.00 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of US$203, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values T-Mobile US at US$250 per share, while the most bearish prices it at US$138. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that T-Mobile US' revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.9% annually. 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. 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..
Before you take the next step you should know about the 2 warning signs for T-Mobile US that we have uncovered.
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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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