In the past year, T-Mobile US, Inc. (TMUS) has seen a substantial increase in insider selling. Telekom Deutsche, a director and 10% owner of TMUS, partook in a notable sell-off on January 18, 2024, unloading 584,730 shares. This transaction is part of a series over the past year where a total of 2,338,920 shares were sold by insiders, with no reported purchases. A record shows a total of 30 instances of insider selling throughout the year.

Such insider selling may indicate either a lack of confidence in the company's prospects or that insiders perceive the stock to be overpriced.

Despite T-Mobile's successful expansion of its 5G network, the company is projected to witness a decrease in revenues in the fourth quarter amid macroeconomic pressures and rigorous competition within the U.S. wireless market.

Street analysts project a 3% year-over-year fall in TMUS' revenue to $19.67 billion for the quarter ended December 2023. Nevertheless, the company's EPS (Earnings Per Share) is forecasted to increase by 22.9% from the previous year's figure, reaching $1.96.

A review of TMUS' past quarter performances indicates that although the wireless service provider has consistently exceeded Street EPS estimations in the trailing four quarters, its revenue performance has not met analysts' expectations.

TMUS is scheduled to announce its fourth-quarter 2023 results on January 25. Given the short-term uncertainties, potential investors might consider it prudent to wait for a more suitable entry point in the stock. An in-depth analysis of some of T-Mobile's key performance indicators could provide further insights.

Fluctuating Financial Performance of T-Mobile US Inc. from 2021 to 2023

T-Mobile US Inc. (TMUS) has seen a fluctuating trailing-12-month net income over the past few years, with both periods of growth and contraction observed. Below is a brief summary:

• From March 2021 ($30.46 billion) to June 2021 ($39.14 billion), there was an increase in net income, indicating a positive growth phase.
• However, a downward trend was noticed from June 2021 ($39.14 billion) to December 2021 ($30.24 billion).
• This was followed by a period of contraction from December 2021 ($30.24 billion) to September 2022 ($15.35 billion).
• From December 2022 ($25.90 billion) to June 2023 ($61.46 billion), there was a significant growth in net income, leading to its peak in the period under review.
• The last recorded net income for T-Mobile US Inc. (as of September 2023) was $77.80 billion, showing a growth from the initial value recorded in March 2021.

If we calculate the growth rate by measuring the last value from the first value, T-Mobile US Inc.'s Net Income grew from $30.46 billion in March 2021 to $77.80 billion in September 2023. This represents a significant growth rate, signifying a strong upward trend despite periodic fluctuations.

Findings:

• The trailing-12-month revenue of T-Mobile US Inc. (TMUS) has experienced fluctuations with a noticeable decline trend over the period 2021 to 2023.

2021 Data

• Starting from March 2021, the Revenue was reported at approximately $77 billion. From here it saw a minor increase of 2.96% towards June reaching $79.3 billion. The number climbed in the third quarter to $79.7 billion and ended the year at about $80.1 billion in December

2022 Analysis

• In 2022, the company sustained its Revenue upwards of $80 billion mark for the first half of the year with March total being approximately $80.5 billion, before dipping to $80.2 billion in June. Though a slight decrease occurred in the third quarter to approximately $80.08 billion, the last quarter showed bigger signs of decline as Revenue fell to approximately $79.6 billion by the end of December.

2023 Performance until September

• Lastly, in 2023 so far, there has been a consistent fall in Revenue. First quarter data indicated a figure of approximately $79.1 billion followed by a drop to $78.6 billion in the second quarter. As of the latest data in September 2023, the Revenue recorded is $78.4 billion.

Overall Growth Rate

• The overall growth rate - when taking into consideration the last recorded value from the initial data point - showed a decrease by approximately 1.67%.

The Current Ratio of T-Mobile US Inc. (TMUS) displays a fluctuating downward trend over the timeline from March 2021 to September 2023, with the figures exhibiting volatility in the interim.

• The data series began with a Current Ratio of 0.96 on March 31, 2021.
• The Current Ratio then decreased to 0.94 on June 30, 2021 and further dipped to 0.87 on September 30.
• A slight bounce up was observed at the end of 2021, with the ratio situated at 0.89.
• Heading into 2022, the value had dropped to 0.81 by the end of the first quarter.
• Shortly thereafter, it bumped up slightly to 0.85 halfway through the year, and ended 2022 at a low of 0.77.
• The year 2023 saw a slow regain, with the Current Ratio reaching 0.79 by the end of the first quarter, then escalating to 0.82 by the end of the second quarter, and eventually hitting 0.86 on September 30, 2023.

Overall, from March 2021 to September 2023, the Current Ratio has declined by around -10%. However, much of this decline happened between 2021 and 2022, while the year 2023 marked an upward adjustment but a failure to recover to former heights.

After analyzing the data series for the Asset Turnover of T-Mobile US Inc. (TMUS), the following trends and fluctuations can be observed:

• March 2021 to March 2023: There has been a slight, but continuous decrease in Asset Turnover from 0.394 to 0.375. This represents a decline of approximately 4.8% over this two-year period.
• Quarterly Fluctuations: While the general trend has been a decrease over these two years, quarterly fluctuations are worth noting. For example, there was a marginal increase in Asset Turnover from June 2023 (Asset Turnover being 0.372) to September 2023 (Asset Turnover increasing to 0.373).
• Recent Trend: Focusing on the most recent year, from March 2022 to March 2023, the Asset Turnover gradually decreased from 0.391 to 0.375. This implies a downturn rate of roughly 4.1% within this year, indicating an accentuated downward trend in the most recent year compared to the overall two-year period.
• Latest Value: As of the last report in September 2023, TMUS's Asset Turnover stands at 0.373, maintaining the declining trend noted throughout this period.

In summary, T-Mobile US Inc.'s Asset Turnover has experienced a slight but consistent decrease over the past two years. However, note that there have been some light variations on a quarterly basis. The more current data highlights a more pronounced downward trend.

Analyzing T-Mobile's Share Price Trend from July 2023 to January 2024

The share price of T-Mobile US Inc. (TMUS) shows a general upward trend from July 2023 to January 2024.

• On July 28, 2023, the share price was $141.00.
• In August 2023, the price experienced some fluctuations, starting at $136.31 at the beginning of the month and dropping to its lowest value of $134.82 by August 25 before picking back up to close the month slightly above where it started.
• In September 2023, the share price saw further increase, beginning at $136.50 and increasing to $141.38 by mid-September. It closed at $139.99 at the end of the month.
• Similar fluctuations continued through October 2023 with prices going up as high as $141.42 and coming down to around the $140 range.
• The share price showed a steady increase in November, starting at a price of $144.52 and increasing to about $148.78 by the-end of the month.
• In December 2023, the share prices continued to rise, starting at $149.69 and hitting a high point of $158.35 by mid-December before dropping slightly to $155.53. It ended the year at a higher point of $158.39.
• From January 2024, the shares saw their peak performance, starting at $162.50 and steadily increasing throughout the month to close at $164.46 on January 23, 2024.

In terms of growth rate, there is an overall positive change in the share price, showing a clear and increasing trend over the given period. Figures suggest an accelerating growth rate particularly towards the end of the year and into the next. Here is a chart of TMUS's price over the past 180 days.

Analyzing TMUS' Stability, Growth, and Quality through POWR Ratings

TMUS has an overall C rating, translating to a Neutral in our POWR Ratings system. It is ranked #6 out of the 16 stocks in the Telecom - Domestic category.

Looking at the POWR ratings for T-Mobile US Inc. (TMUS) along the 3 most noteworthy dimensions, namely Stability, Growth, and Quality, from July 2023 to January 2024, we observe the following:

Stability has consistently been the highest rated dimension for TMUS with the highest score being 92 in September and October 2023. Score for stability remained notably consistent, averaging around the high 80s and low 90s, which points to a well-balanced and resilient performance.

Next is Growth, which started at 86 in July 2023 and peaked at 92 in August and September 2023. A slight downward trend is noticed from October 2023, with scores lowering down to 82 by January 2024. This indicates a period of rapid growth followed by a slight slowing down but remaining relatively high overall.

Lastly, the Quality dimension had a more varied performance. Starting at 61 in July 2023, there was a gradual increase peaking at 69 in November 2023, December 2023, and January 2024. This suggests an improving quality performance over this period. An overall look into these POWR Ratings for TMUS shows a company with a strong stability rating, considerable growth potential and improving quality measures.

How does T-Mobile US Inc. (TMUS) Stack Up Against its Peers?

Other stocks in the Telecom - Domestic sector that may be worth considering are Spok Holdings, Inc. (SPOK), InterDigital Inc. (IDCC), and Ooma Inc. (OOMA) -- they have better POWR Ratings.

What To Do Next?

43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.

2024 Stock Market Outlook >

TMUS shares fell $0.39 (-0.24%) in premarket trading Wednesday. Year-to-date, TMUS has gained 2.13%, versus a 2.01% rise in the benchmark S&P 500 index during the same period.

Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.

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