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T-Mobile US (NasdaqGS:TMUS) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

T-Mobile US, Inc. (NasdaqGS:TMUS) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of $0.44/share on revenue of $18.292 billion. The consensus earnings per share (EPS) of $0.44/share is based on a poll of 11 analysts and represents a decline in eps of −56.5% over the same quarter last year, when the company reported earnings of $1.01/share.

The revenue forecast of $18.292 billion based on a poll of 15 analysts implies a year-over-year (YoY) growth in revenue of 65.4%. Last year the company reported $11.061 billion in revenue for the quarter.

Expected to report EPS contraction of −56.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $18,291.57 $11,061.00 65.4%
EPS $0.44 $1.01 −56.5%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from T-Mobile US, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.15 $0.84 460.2% Beat
Q1, 2020 $1.03 $1.10 6.5% Beat
Q4, 2019 $0.84 $0.87 4.1% Beat
Q3, 2019 $0.98 $1.01 2.7% Beat
Q2, 2019 $0.98 $1.09 11.6% Beat
Q1, 2019 $0.92 $1.06 15.8% Beat
Q4, 2018 $0.67 $0.75 12.6% Beat
Q3, 2018 $0.83 $0.93 12.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 6.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $107.90 $115.09 6.7% Increase
May 6, 2020 $88.97 $95.29 7.1% Increase
February 6, 2020 $81.79 $85.44 4.5% Increase
October 28, 2019 $81.62 $81.77 0.2% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.04, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.04 implies a 2.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

T-Mobile US, Inc. is currently trading at $111.04/share, down −1.6% for the day. The company is trading at approximately 90.0% of its 52-week high of $123.42/share. The company’s stock price is down −3.5% since the last earnings report and down −1.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 47.84 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:TMUS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 58.06 and a forward P/E multiple of 68.22.

T-Mobile US, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.18. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $111.04
P/E Ratio 58.1x
P/E Ratio (Fwd) 68.2x
PEG Ratio −2.2
Total Debt / Total Capital 41.2%
Levered Free Cash Flow -$1.002 billion
EV / EBITDA 13.7x

Finbox

T-Mobile US, Inc. is a large-cap stock with a market capitalization of $139.6 billion and a total enterprise value of $226.4 billion. The company operates in the Communication Services sector and the Wireless Telecommunication Services industry.

T-Mobile US, Inc., through its subsidiaries, provides wireless services for branded postpaid and prepaid, and wholesale customers in the United States, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging, and data services. It also provides wireless devices, including smartphones, wearables, tablets, and other mobile communication devices, as well as accessories; and wirelines services. The company offers its services under the T-Mobile, Metro by T-Mobile, and Sprint brands. The company was founded in 1994 and is headquartered in Bellevue, Washington.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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