T-Mobile Surges 53.5% in a Year: Reason to Buy the Stock?

T-Mobile, US Inc. TMUS has gained 53.5% over the past year compared with the Wireless National industry’s growth of 38.1%. The stock has also outperformed the Zacks Computer & Technology sector and the S&P 500’s growth of 7.4% and 9.3%, respectively.One-Year Price PerformanceImage Source: Zacks Investment ResearchThe company has outperformed its peer, Verizon Communications Inc. VZ, but underperformed relative to AT&T, Inc. T. Verizon has gained 11.8%, while AT&T has surged 63.9% during this period.TMUS Rides on Portfolio Strength & Customer-Oriented ApproachT-Mobile boasts a leadership position in the 5G market. It is steadily deploying 5G with the mid-band 2.5 GHz spectrum from Sprint and plans to further accelerate 5G spectrum deployment in upcoming quarters. The 2.5 GHz spectrum provides high speed and comprehensive coverage with signals that go through walls and trees, unlike 5G networks that are controlled by the mmWave spectrum. This gives the un-carrier a competitive edge over AT&T and Verizon.Moreover, the company is actively working to make its network infrastructure more resilient and eliminate network outages during extreme weather events such as hurricanes and wildfires. T-Mobile’s Self-Organizing Network (SON) utilizes AI with real time data to asses nearby cell sites, identify outages. Then it automatically adjusts the infrastructure to continue to provide reliable service during and after the disaster. The company has integrated Dataminr’s AI-powered alert systems to expedite resource mobilization and swift response during extreme situations. T-Satellite brings direct connect satellite-based connectivity, allowing users to send texts regardless of carriers and receive alerts when cellular networks are disrupted. Advancing technology to not only improve everyday services but also create resilient network infrastructure for seamless connectivity in any condition underscores T-Mobile’s strong customer-focused business approach.Such initiatives are driving customer engagement across T-Mobile’s network portfolio. The company is witnessing solid growth in postpaid customers over the past few quarters. TMUS recorded 1.3 million postpaid net customer additions and 424,000 net high-speed Internet additions. The company’s effort to update and optimize pricing plans as per evolving requirements is also driving customer additions. Its strong focus on network modernization, coverage, and capacity expansion and customer service has helped it to record healthy top-line growth over the past few years.Image Source: Zacks Investment ResearchMajor Challenges for TMUSThe company operates in a highly competitive and saturated U.S. wireless market. T-Mobile has several wireless competitors, some of which have greater resources than it does. The fast-paced nature of the telecommunication industry demands rapid technological innovation for maintaining a competitive edge in parameters like price, network coverage and customer service. Intensifying competition with Verizon and AT&T, with a relatively fixed pool of customers, is putting pressure on pricing.T-Mobile has introduced low-priced service plans for customers and small business entities. Moreover, growing spending on promotional activities such as free music streaming, video offers to lure users from competitors, is also creating a margin squeeze.Estimate Revision Trend of TMUSTMUS is currently witnessing an uptrend in estimate revisions. Earnings estimates for 2025 have jumped 1.44% to $10.56 over the past 60 days, while the same for 2026 has increased 1.54% to $12.54. The positive estimate revision portrays bullish sentiments about the stock’s growth potential.Image Source: Zacks Investment ResearchKey Valuation MetricFrom a valuation standpoint, T-Mobile appears to be trading at a premium relative to the industry and trading above its mean. Going by the price/earnings ratio, the company shares currently trade at 22.16 forward earnings, much higher than 13.81 for the industry and above the stock’s mean of 21.28.Image Source: Zacks Investment ResearchEnd NoteWith an industry-leading network portfolio and a strong focus on innovation, T-Mobile is well-positioned to capitalize on the emerging trends in the wireless industry. Its network expansion in rural areas, launch of direct-to-cell satellite services to eliminate dead spots, support for small businesses, and efforts to bridge the digital divide will allow it to hold a dominant position in the telecommunication landscape. Upward estimate revision underscores growing investors’ confidence.The stock delivered a trailing four-quarter average earnings surprise of 10.89%. With a Zacks Rank #2 (Buy), the company appears primed for further stock price appreciation despite some headwinds. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks