Why Is T-Mobile (TMUS) Up 4.3% Since Last Earnings Report?

A month has gone by since the last earnings report for T-Mobile (TMUS). Shares have added about 4.3% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is T-Mobile due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for T-Mobile US, Inc. before we dive into how investors and analysts have reacted as of late.T-Mobile's Q2 Earnings Beat Estimates on Solid Revenues, Guidance UpT-Mobile reported impressive second-quarter 2025 results, with both top and bottom lines beating the respective Zacks Consensus Estimate. This Bellevue, WA-based wireless service provider reported a top-line expansion backed by industry-leading postpaid customer growth. T-Mobile follows a multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600 MHz, 1.9 GHz and 2.5 GHz bands.TMUS’ Net IncomeNet income in the second quarter was $3.22 billion or $2.84 per share, up from $2.92 billion or $2.49 in the year-ago quarter. The 10.2% year-over-year growth was primarily driven by the top-line expansion. The bottom line exceeded the Zacks Consensus Estimate of $2.69.TMUS’ RevenuesNet sales were $21.13 billion, up from $19.77 billion in the year-ago quarter, driven by solid growth in service revenues. The top line beat the consensus estimate of $20.97 billion.TMUS’ Segment Results in Q2Total Service revenues were $17.43 billion, up from $16.42 billion in the year-ago quarter. The segment’s net sales beat our revenue estimate of $17.08 billion. The 6.1% year-over-year growth was primarily driven by solid demand for postpaid services. Net sales from Postpaid Services contributed $14.07 billion in revenues, up 9.1% year over year.During the quarter, T-Mobile added 1.7 million postpaid net customers and 318,000 postpaid net accounts. Postpaid phone net customer additions were 830,000. The postpaid phone churn rate was 0.9%. 5G broadband net customer additions were 454,000. Postpaid average revenues per account rose to $149.87 from $142.54 in the year-ago quarter.Net sales from Prepaid services were $2.64 billion, up from $2.59 billion in the year-earlier quarter. Prepaid net customer addition was 39,000, with a churn rate of 2.65%. Wholesale and other service revenues decreased to $717 million from $938 million in the year-earlier quarter. Prepaid average revenues per user declined to $34.63 from $35.94 in the year-ago quarter.Equipment revenues were $3.43 billion, up from $3.1 billion in the year-ago quarter. Moreover, the segment’s revenues surpassed our estimate of $3.36 billion. This improvement was primarily attributed to a higher average revenue per device sold, owing to an increase in the high-end phone mix.Other revenues were $255 million, up from the prior-year quarter’s of $237 million.Other Details for TMUSTotal operating expenses increased to $15.91 billion from $15.14 billion in the year-ago quarter. Operating income rose to $5.2 billion from $4.6 billion. T-Mobile recorded core adjusted EBITDA of $8.54 billion compared with $8.02 billion a year ago, backed by solid growth in service revenues.TMUS’ Cash Flow & LiquidityIn the March quarter, T-Mobile generated $6.99 billion of cash from operating activities compared with $5.52 billion in the prior-year quarter. Adjusted free cash flow was $4.6 billion, up from $4.4 billion in the year-earlier quarter.As of June 30, 2025, the company had $10.25 billion in cash and cash equivalents, with $75.01 billion of long-term debt. During the quarter, it repurchased 10.1 million shares for $2.5 billion.TMUS’ OutlookBacked by solid customer addition, the company has upgraded its guidance for 2025. It now expects postpaid net customer additions to be between 6.1 million and 6.4 million, up from 5.5-6 million estimated earlier. Core adjusted EBITDA is estimated to be $33.3-$33.7 billion. It anticipates cash from operating activities in the range of $27.1-$27.5 billion. TMUS expects adjusted free cash flow in the band of $17.6-$18 billion. Capital expenditure is anticipated to be around $9.5 billion.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.VGM ScoresAt this time, T-Mobile has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, T-Mobile has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.One Big Gain, Every Trading DayTo help you take full advantage of this market, you’re invited to access every stock recommendation in all our private portfolios - for just $1.Zacks private portfolio services that closed 256 double and triple-digit winners in 2024 alone. That’s about one big gain every day the market was open. 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