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Should You Buy T-Mobile (TMUS) Stock Ahead of Earnings?
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Shares of T-Mobile (TMUS - Free Report) have climbed 5% over the last four weeks in a sign that investors might expect strong quarterly results from the wireless carrier. Now, as we approach the release of its Q1 earnings report, let’s take a look to see if T-Mobile is a stock investors might want to buy.
T-Mobile is expected to report its quarterly earnings on Monday, April 30. A strong Q1 could propel the company forward, and lift it out of a nearly two-year stretch of relatively flat price movement. T-Mobile follows fellow U.S. wireless giants AT&T (T - Free Report) and Verizon (VZ - Free Report) , which both reported quarterly earnings earlier this week.
AT&T posted adjusted earnings that climbed from $0.74 per share in the year-ago period to $0.85 per share, but fell 2 cents below our Zacks Consensus Estimate. Meanwhile, Verizon’s adjusted quarterly earnings jumped over 20% and also topped our quarterly estimate.
With that said, we will dive into some of T-Mobile’s current quarterly estimates and fundamentals to help investors understand what to expect from T-Mobile’s Q1 financial results.
Latest Outlook & Valuation
Our current Zacks Consensus Estimates are calling for T-Mobile to post revenues of $10.38 billion, which would mark a nearly 9% climb from the year-ago period. On the other end of the income statement, the company’s quarterly earnings are expected to soar by 56.5% to $0.72 per share.
Heading into Thursday, T-Mobile was trading with a Forward P/E of 17.8. This marked a premium compared to the “Wireless National” industry’s average of 12.2. It is worth noting that T-Mobile is trading well below its median Forward P/E of 24.4, which means it currently presents far better value than it has throughout most of the year.
Earnings ESP Whispers
Investors will also want to understand what chance T-Mobile has to surprise investors with better-than-expected earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
T-Mobile is currently a Zacks Rank #3 (Hold) and rocks an Earnings ESP of 6.76%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—is calling for earnings of $0.77 per share. This figure comes in 5 cents above our current consensus estimate, which means that investors should consider T-Mobile a stock that could top quarterly earnings estimates.
Surprise History
T-Mobile’s earnings surprise history and the effect that these surprises have had on its share prices are two other important factors to consider ahead of its earnings report.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
Investors can see that T-Mobile has posted very strong earnings results over the last two years. The company has also posted an average earnings surprise of 47.6% in the trailing four periods.
With that said, we can also judge the price effect of these earnings beats by comparing the closing price of the stock two days before the report and two days after the report. T-Mobile stock has turned positive in six out of these last nine windows.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Should You Buy T-Mobile (TMUS) Stock Ahead of Earnings?
Shares of T-Mobile (TMUS - Free Report) have climbed 5% over the last four weeks in a sign that investors might expect strong quarterly results from the wireless carrier. Now, as we approach the release of its Q1 earnings report, let’s take a look to see if T-Mobile is a stock investors might want to buy.
T-Mobile is expected to report its quarterly earnings on Monday, April 30. A strong Q1 could propel the company forward, and lift it out of a nearly two-year stretch of relatively flat price movement. T-Mobile follows fellow U.S. wireless giants AT&T (T - Free Report) and Verizon (VZ - Free Report) , which both reported quarterly earnings earlier this week.
AT&T posted adjusted earnings that climbed from $0.74 per share in the year-ago period to $0.85 per share, but fell 2 cents below our Zacks Consensus Estimate. Meanwhile, Verizon’s adjusted quarterly earnings jumped over 20% and also topped our quarterly estimate.
With that said, we will dive into some of T-Mobile’s current quarterly estimates and fundamentals to help investors understand what to expect from T-Mobile’s Q1 financial results.
Latest Outlook & Valuation
Our current Zacks Consensus Estimates are calling for T-Mobile to post revenues of $10.38 billion, which would mark a nearly 9% climb from the year-ago period. On the other end of the income statement, the company’s quarterly earnings are expected to soar by 56.5% to $0.72 per share.
Heading into Thursday, T-Mobile was trading with a Forward P/E of 17.8. This marked a premium compared to the “Wireless National” industry’s average of 12.2. It is worth noting that T-Mobile is trading well below its median Forward P/E of 24.4, which means it currently presents far better value than it has throughout most of the year.
Earnings ESP Whispers
Investors will also want to understand what chance T-Mobile has to surprise investors with better-than-expected earnings results. For this, we turn to our Earnings ESP figure.
Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
T-Mobile is currently a Zacks Rank #3 (Hold) and rocks an Earnings ESP of 6.76%. The company’s Most Accurate Estimate—the representation of the most recent analyst sentiment—is calling for earnings of $0.77 per share. This figure comes in 5 cents above our current consensus estimate, which means that investors should consider T-Mobile a stock that could top quarterly earnings estimates.
Surprise History
T-Mobile’s earnings surprise history and the effect that these surprises have had on its share prices are two other important factors to consider ahead of its earnings report.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
T-Mobile US, Inc. Price, Consensus and EPS Surprise | T-Mobile US, Inc. Quote
Investors can see that T-Mobile has posted very strong earnings results over the last two years. The company has also posted an average earnings surprise of 47.6% in the trailing four periods.
With that said, we can also judge the price effect of these earnings beats by comparing the closing price of the stock two days before the report and two days after the report. T-Mobile stock has turned positive in six out of these last nine windows.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>