T-Mobile US Inc

T-Mobile US, Inc. (NASDAQ: TMUS) is a provider of mobile communications services, including voice, messaging and data, under its flagship brands, T-Mobile and Metro by T-Mobile in the United States, Puerto Rico and the United States Virgin Islands. The Company provides mobile communications services primarily using its 4G Long Term Evolution (LTE) network and its 5G technology network. It also offers a selection of wireless devices, including handsets, tablets and other mobile communication devices, and accessories for sale, as well as financing through equipment instalment plans (EIP).

Recent Business and Financial Highlights:

• Customer Growth Driven by Network and Value Proposition: The company reported robust customer growth, supported by a combination of its network quality and competitive value offerings. In the postpaid segment, the company added 301,000 net accounts, leading the industry. It also added 1.3 million net postpaid customers, surpassing 100 million postpaid customers in total. The postpaid phone segment experienced a net addition of 777,000 customers, the highest second-quarter growth in the company's history, with a postpaid phone churn rate of 0.80%. Additionally, the high-speed internet segment added 406,000 net customers, marking the highest share of industry net additions recorded.
• Financial Growth Reflects Customer Expansion: The company’s customer growth has positively impacted its financial performance. Service revenues reached USD 16.4 billion, reflecting a 4% year-over-year increase, with postpaid service revenues growing by 7% to USD 12.9 billion. The company reported a net income of USD 2.9 billion, a 32% increase year-over-year, and diluted earnings per share (EPS) grew by 34% to USD 2.49. Core Adjusted EBITDA increased by 9% to USD 8.0 billion. The company also achieved a record high in net cash provided by operating activities at USD 5.5 billion, a 27% increase year-over-year, while Adjusted Free Cash Flow reached USD 4.4 billion, marking a 54% year-over-year increase. In Q2 2024, the company returned USD 3.0 billion to stockholders, including USD 2.3 billion in stock repurchases and a quarterly dividend of USD 759 million.
• Leadership in 5G Network Performance: The company continues to excel in 5G network performance, leading the industry with one of the largest and most advanced networks. It achieved top rankings across multiple categories in third-party reports, including consistency in overall network performance and consumer sentiment. The company's 5G network, with 87% of its traffic carried on sites featuring three spectrum layers, offers a consistent and high-quality experience for its users.
• Consistent Customer Growth Amid Market Shifts: Despite some fluctuations in growth, the company maintained a strong position in customer acquisition. Postpaid net account additions grew by 2,000 year-over-year to 301,000, while postpaid net customer additions saw a decrease of 223,000 year-over-year to 1.3 million. The postpaid phone segment added 777,000 net customers, an increase of 17,000 year-over-year, with a slight increase in postpaid phone churn to 0.80%. The prepaid segment saw 179,000 net customer additions, up by 55,000 year-over-year, with a slight improvement in prepaid churn to 2.54%. The high-speed internet segment added 406,000 net customers, a decrease of 103,000 year-over-year, ending the quarter with 5.6 million customers. Overall, total net customer additions were 1.5 million, a decrease of 168,000 year-over-year, bringing total customer connections to 125.9 million.
• Financial Performance and Shareholder Returns: The company reported steady financial performance, with total service revenues increasing by 4% year-over-year to USD 16.4 billion and postpaid service revenues rising by 7% to USD 12.9 billion. Net income grew by 32% year-over-year to USD 2.9 billion, while diluted EPS increased by 34% to USD 2.49. Core Adjusted EBITDA saw a 9% increase to USD 8.0 billion, and net cash provided by operating activities rose by 27% to USD 5.5 billion, despite merger-related costs of USD 241 million. Cash purchases of property and equipment decreased by 27% year-over-year to USD 2.0 billion. Adjusted Free Cash Flow increased by 54% year-over-year to USD 4.4 billion. In Q2 2024, the company returned value to shareholders through the repurchase of 14.0 million shares of common stock for USD 2.3 billion, bringing cumulative repurchases to USD 22.1 billion. The remaining authorization for stock repurchases and quarterly dividends stands at USD 8.7 billion through December 2024, with the next dividend payable on September 12, 2024.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 72.57, currently inside overbought zone, with expectations of consolidation or some correction from the physiological resistance around USD 200. Additionally, the stock's current positioning is above both 50-Day SMA and 200-Day SMA, which can act as a short to medium term support levels.

As per the above-mentioned price action, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given to T-Mobile US, Inc. (NASDAQ: TMUS) at the closing market price of USD 193.61 as of August 08, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is August 08, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.s

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.