Benchmark has raised the price target for T-Mobile US (NASDAQ: NASDAQ:TMUS) to $255, up from the previous target of $250, while maintaining a Buy rating on the stock.
The adjustment came in response to T-Mobile's strong third-quarter 2024 results, which were released on Tuesday, and included positive guidance revisions as well as a detailed discussion by management regarding the company's operational momentum.
The analyst from Benchmark highlighted T-Mobile's notable year-over-year postpaid revenue growth, which is currently double that of its peers in the mobile network operator sector.
This growth is attributed to T-Mobile's leadership in urban markets, the combination of a superior 5G network offering relative value, and the company's efforts to improve market penetration in smaller markets and corporate accounts.
T-Mobile's third-quarter performance was robust, prompting the analyst to suggest that the market could potentially value the company even higher, with valuations in the vicinity of $300, should it fully recognize T-Mobile's superior growth trajectory.
In other recent news, T-Mobile US has been the subject of positive adjustments by TD Cowen and BofA Securities, both raising their price targets for the mobile carrier following its strong performance in the third quarter of 2024.
T-Mobile exceeded expectations on key financial metrics such as EBITDA, revenue, and free cash flow, prompting the firms to sustain their Buy rating on the stock. The company also surpassed forecasts with its postpaid phone additions, supported by low customer churn and an average revenue per user that beat estimates.
T-Mobile's recent success in the wireless market was highlighted by TD Cowen, noting the company's significant opportunity for continued growth in the sector. The company's updated outlook for 2024 suggests a positive trajectory with its business operations and financial health.
BofA Securities also raised its price target, citing T-Mobile's unique proposition for shareholder returns and its commitment to returning $50 billion through share buybacks and dividends over the next three years.
In its third-quarter earnings call, T-Mobile announced its best Q3 postpaid phone net additions in a decade and a record low churn rate. The company also raised its full-year guidance for 2024, reflecting confidence in its growth strategy.
InvestingPro Insights
T-Mobile US (NASDAQ:TMUS) continues to demonstrate strong market performance, aligning with Benchmark's optimistic outlook. According to InvestingPro data, T-Mobile boasts a market capitalization of $257.8 billion, reflecting its significant presence in the wireless telecommunication services industry. The company's revenue for the last twelve months as of Q2 2024 stands at $79.1 billion, with a modest growth of 0.66%, indicating steady financial performance.
InvestingPro Tips highlight T-Mobile's financial strength and market position. The company has a perfect Piotroski Score of 9, suggesting robust financial health. Additionally, T-Mobile is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.46 as of Q2 2024, potentially indicating an undervalued stock. This aligns with Benchmark's view that the market might further recognize T-Mobile's growth potential.
The stock's strong performance is evident in its price movements, with InvestingPro data showing a 59.06% total return over the past year and a 35.53% return over the last six months. This momentum supports Benchmark's decision to raise the price target and maintain a Buy rating.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for T-Mobile US, providing deeper insights into the company's financial health and market position.
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