T-Mobile US (TMUS) Stock Forecast & Price Target

T-Mobile US has demonstrated strong financial performance, with Return on Capital (ROC) rising from 6.40% to 6.91% over the last twelve months (LTM), indicating improved efficiency and profitability. The company reported a 7.30% year-over-year increase in Net Sales Revenue, reaching $85.85 billion, and forecasts a further growth of 7.98% in the near term, bolstered by a robust 34% year-over-year increase in broadband subscribers. Additionally, T-Mobile's postpaid services revenue and service revenues both experienced the highest industry growth rates at 12% and 9% year-over-year, respectively, contributing to a Net Operating Profit After Tax (NOPAT) growth of 9.21%.

T-Mobile US's stock faces a negative outlook due to several fundamental financial concerns, including a low FY26E EV/EBITDA multiple of 9.9x, which marks its lowest level in over a year, coupled with weaker-than-expected prepaid and wholesale revenue streams. Additional risks stem from potential revenue and cash flow shortfalls driven by economic, competitive, or operational challenges, as well as uncertainty surrounding merger-related expenses and higher cash taxes impacting 2026 EPS and free cash flow guidance. Furthermore, T-Mobile's structural challenges in competing within a converged market, particularly its lag in fiber investments compared to peers, contribute to concerns over churn pressure and decreasing average revenue per user (ARPU), which may result in lower subscriber growth over time.