T-Mobile US stock holds near highs as customer growth and cash returns stay in focus

T-Mobile US, Inc. (ISIN US8725901040) has seen T-Mobile US stock trade close to its recent highs in 2024, supported by robust subscriber momentum, higher free cash flow, and large capital returns to shareholders after the Sprint integration, according to the company and market data as of 16 May 2024.

Revenue of $19.6 billion in Q1 2024

According to T-Mobile US' first-quarter 2024 results published on 25 April 2024, the company generated total revenue of $19.6 billion in Q1 2024.

In the same release, T-Mobile US reported that service revenues reached $16.1 billion in Q1 2024, compared with $15.5 billion in Q1 2023, an increase of about 3.9% year over year.

The carrier also highlighted postpaid accounts and subscriber additions as a key driver of this growth, with total postpaid accounts up versus the prior year, reinforcing the company’s long-running strategy of expanding its higher-value customer base.

Net income up 22 percent to $2.4 billion

According to the same Q1 2024 earnings release, T-Mobile US posted net income of $2.4 billion in Q1 2024, compared with $1.9 billion in Q1 2023, an increase of approximately 22%, demonstrating improved profitability alongside revenue growth.

Diluted earnings per share came in at $2.00 for Q1 2024, up from $1.58 in Q1 2023, reflecting both higher net income and a lower share count due to ongoing repurchases.

Adjusted core EBITDA, a key profitability metric for telecom operators, reached $7.6 billion in Q1 2024, according to the company, compared with $7.2 billion a year earlier, indicating continued operating leverage from the integrated network.

Free cash flow guidance raised to at least $16.3 billion

In its 25 April 2024 update, T-Mobile US reaffirmed and refined its 2024 outlook, stating that it expects postpaid net customer additions of between 5.2 million and 5.6 million for the full year 2024.

The company also guided for 2024 core adjusted EBITDA in the range of $32.6 billion to $33.2 billion, compared with $30.0 billion achieved in 2023, implying year-over-year growth of up to about 10.7% at the top end.

For free cash flow, T-Mobile US projected a range of $16.3 billion to $16.9 billion in 2024, versus $13.6 billion in 2023, which represents an increase of up to roughly 24% and underscores the carrier’s capacity to fund share repurchases and debt reduction simultaneously.

Magenta Max and 5G network scale

T-Mobile US continues to emphasize its Magenta Max and Go5G tariff families, which are designed to monetize heavy 5G usage and upsell customers into higher-value plans, as described in product materials and management commentary around the Q1 2024 results.

The company has communicated that it covers more than 300 million people with its mid-band Ultra Capacity 5G network and over 330 million with its broader 5G footprint in the United States, giving it a perceived network-scale advantage versus domestic competitors.

Nadsaq-listed T-Mobile US stock and valuation backdrop

T-Mobile US stock is listed on Nasdaq under the ticker TMUS and is a constituent of the S&P 500 index, which makes it widely held among global equity funds and index products.

According to market data cited in financial portals, T-Mobile US had a market capitalization of roughly $193 billion as of mid May 2024, reflecting the strong rerating of the equity since the close of the Sprint transaction in 2020.

Over the twelve months leading into 16 May 2024, shares have traded between a 52 week low near $127 and a 52 week high around $168, placing the latest levels relatively close to the upper end of this range and indicating that a large portion of the merger and cash flow story is already reflected in the valuation.