Earnings Release Is T-Mobile A Buy?

 

T-Mobile US, Inc. (TMUS). T-Mobile beat expectations for its fourth quarter earnings report, posting revenue of $20.3 billion and earnings per share of $0.60.

Industry-Leading Customer Growth

  • Total net additions of 1.4 million, best in industry
  • Postpaid net additions of 1.2 million, best in industry and raising 2021 guidance
  • Postpaid phone net additions of 773 thousand, best in industry

Strong Financial Results Drive Guidance Raise

  • Total revenues of $19.8 billion and service revenues of $14.2 billion
  • Net income of $933 million, diluted earnings per share (“EPS”) of $0.74 and Adjusted EBITDA(1) of $6.9 billion
  • Core Adjusted EBITDA(1) of $5.9 billion, raising 2021 guidance
  • Net cash provided by operating activities of $3.7 billion and Free Cash Flow(1) of $1.3 billion, raising 2021 guidance

Raising 2021 Merger Synergies Guidance on Continued Integration Progress

  • Expect Merger synergies of $2.8 billion to $3.1 billion
  • Approximately 50 percent of Sprint customer traffic is now carried on the T-Mobile network, 2x more than last quarter
  • Approximately 20 percent of Sprint customers have been moved to the T-Mobile network

America’s Largest, Fastest and Most Reliable 5G Network Extends its Lead

  • Extended Range 5G covers 295 million people across 1.6 million square miles, 4x more than Verizon and 2x more than AT&T
  • Ultra Capacity 5G covers 140 million people and on track to cover 200 million people nationwide by the end of 2021
  • Majority of independent third-party network benchmarking reports show T-Mobile as the clear leader in 5G speed and availability
  • Network perception catching up to reality with a nearly 120 percent increase in consumers who view T-Mobile as “The 5G Company” since Q3 2019

T-Mobile US, Inc. reported first quarter 2021 results today, highlighted by industry-leading total net additions, postpaid net additions, and postpaid phone net additions. The company also reported strong financial results and raised 2021 guidance as its synergy-backed model simultaneously delivers customer growth and profitability.

  • The company added a net 1.4M customers; of those, postpaid net adds were 1.2M, and postpaid phone net adds were 773,000, all industry bests.
  • Revenues rose 78% to $19.8B; service revenues rose to $14.2B.
  • Net income rose to $933M, and EBITDA ticked up to $6.91B from $6.75B.
  • Net cash from operations was $3.7B, and free cash flow was $1.3B.
  • As for guidance, it’s raising merger synergy forecasts amid ongoing integration progress (about 50% of Sprint customer traffic is now carried on the T-Mobile network, and about 20% of Sprint customers have been moved over). It now sees merger synergies of $2.8B-$3.1B this year (up from $2.7B-$3B), doubling last year’s synergies.
  • It now expects postpaid net adds will be between 4.4M and 4.9M (up from 4M-4.7M). And it’s raising its operating cash forecast to $13.2B-$13.6B (from $13B-$13.5B) and its expectations for free cash flow to $5.1B-$5.5B (from $4.9B-$5.4B).

 

CWEB Analyst’s have initiated a BUY Rating for T-Mobile US, Inc. (TMUS) and potential upside of $300 in 2021. The fundamentals of the company are to strong and T-Mobile is the largest provided of 5G direct competition to Verizon and AT@T which have less 5G coverage.


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