Back to top

Image: Shutterstock

Is a Beat in Store for T-Mobile (TMUS) This Earnings Season?

Read MoreHide Full Article

T-Mobile US, Inc. (TMUS - Free Report) is set to report first-quarter 2021 results on May 4, after the closing bell. In the last reported quarter, the company delivered an earnings surprise of 102%. It pulled off a trailing four-quarter earnings surprise of 177.2%, on average.

This Bellevue, WA-based wireless carrier is expected to have recorded significantly higher revenues year over year, driven by the Sprint merger and customer growth.

Factors at Play

During the first quarter, T-Mobile acquired the Sprint-branded wireless operating assets of Brookings Municipal Utilities (“BMU”) in Brookings, SD. The acquisition expanded T-Mobile’s retail distribution and enhanced network coverage in the area. The deal includes BMU’s wireless network, retail stores and PCS spectrum.

Also, T-Mobile announced multi-billion-dollar agreements with Ericsson and Nokia to continue expanding its 5G network. These deals enable the company to add more 5G coverage and technical capabilities across all of its spectrum bands.

T-Mobile introduced Magenta MAX, a plan that takes full advantage of 5G’s capacity and speed. It delivers unlimited premium data, both 4G LTE and 5G, on a smartphone.

The company deployed Ultra Capacity 5G at the Miami Veterans Affairs Healthcare System. The deployment has brought superfast 5G speed and performance to medical staff and patients with capable devices.

T-Mobile boosted its leadership in the 5G network by investing more than $9.3 billion in FCC’s C-Band auction. It secured an average of 40 MHz of C-Band in key areas that are home to almost 225 million people.

Such developments are likely to have had a positive impact on the company’s top line in the first quarter.

For the March quarter, the Zacks Consensus Estimate for revenues is pegged at $18,845 million, indicating growth of 69.6% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings per share is pegged at 55 cents, which suggests a decline of 55.3%. This is likely due to an increase in expenses related to the Sprint merger.

What Our Model Says

Our proven model predicts an earnings beat for T-Mobile this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: T-Mobile’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +20.88% as the former is pegged at 64 cents and the latter at 55 cents.

TMobile US, Inc. Price and EPS Surprise

TMobile US, Inc. Price and EPS Surprise

TMobile US, Inc. price-eps-surprise | TMobile US, Inc. Quote

Zacks Rank: T-Mobile currently carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Ironwood Pharmaceuticals, Inc. (IRWD - Free Report) is slated to release first-quarter 2021 results on May 6. It has an Earnings ESP of +14.94% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

GasLog Partners LP is scheduled to release first-quarter 2021 results on May 6. The company has an Earnings ESP of +7.25% and a Zacks Rank #1.

Teradata Corporation (TDC - Free Report) has an Earnings ESP of +47.03% and a Zacks Rank of 2. The company is set to report first-quarter 2021 results on May 6.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in