As of May 25, 2025, T-Mobile US Inc has a Discounted Cash Flow (DCF) derived fair value of $294.49 per share. With the current market price at $242.88, this represents a potential upside of 21.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $256.49 |
| DCF Fair Value (10-year) | $294.49 |
| Potential Upside (5-year) | 5.6% |
| Potential Upside (10-year) | 21.3% |
| Discount Rate (WACC) | 5.5% - 7.3% |
Revenue is projected to grow from $81400 million in 12-2024 to $118996 million by 12-2034, representing a compound annual growth rate of approximately 3.9%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 81400 | 4% |
| 12-2025 | 86321 | 6% |
| 12-2026 | 91157 | 6% |
| 12-2027 | 93450 | 3% |
| 12-2028 | 95319 | 2% |
| 12-2029 | 100057 | 5% |
| 12-2030 | 102058 | 2% |
| 12-2031 | 104325 | 2% |
| 12-2032 | 106411 | 2% |
| 12-2033 | 112845 | 6% |
| 12-2034 | 118996 | 5% |
Net profit margin is expected to improve from 14% in 12-2024 to 17% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 11339 | 14% |
| 12-2025 | 12616 | 15% |
| 12-2026 | 13829 | 15% |
| 12-2027 | 14685 | 16% |
| 12-2028 | 15487 | 16% |
| 12-2029 | 16780 | 17% |
| 12-2030 | 17115 | 17% |
| 12-2031 | 17495 | 17% |
| 12-2032 | 17845 | 17% |
| 12-2033 | 18924 | 17% |
| 12-2034 | 19956 | 17% |
with a 5-year average of $14630 million. Projected CapEx is expected to maintain at approximately 19% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 15663 |
| 12-2026 | 14746 |
| 12-2027 | 14794 |
| 12-2028 | 16209 |
| 12-2029 | 17502 |
| 12-2030 | 18093 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 22 |
| Days Inventory | 21 |
| Days Payables | 50 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 26633 | 2710 | 12150 | (2,353) | 14126 |
| 2026 | 36357 | 3961 | 17108 | 1059 | 14228 |
| 2027 | 37601 | 4207 | 17538 | 749 | 15108 |
| 2028 | 40127 | 4436 | 17889 | (585) | 18387 |
| 2029 | 43281 | 4806 | 18778 | 498 | 19199 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 256.49 | 5.6% |
| 10-Year DCF (Growth) | 294.49 | 21.3% |
| 5-Year DCF (EBITDA) | 206.75 | -14.9% |
| 10-Year DCF (EBITDA) | 242.24 | -0.3% |
Is T-Mobile US Inc (TMUS) a buy or a sell? T-Mobile US Inc is definitely a buy. Based on our DCF analysis, T-Mobile US Inc (TMUS) appears to be moderately undervalued with upside potential of 21.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a buy at the current market price of $242.88.