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T-Mobile (TMUS) Outpaces Stock Market Gains: What You Should Know

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T-Mobile (TMUS - Free Report) closed at $132.59 in the latest trading session, marking a +1.4% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.81%. At the same time, the Dow added 0.3%, and the tech-heavy Nasdaq gained 0.61%.

Heading into today, shares of the wireless carrier had gained 6.11% over the past month, outpacing the Computer and Technology sector's gain of 4.13% and the S&P 500's gain of 5.64% in that time.

Investors will be hoping for strength from T-Mobile as it approaches its next earnings release. The company is expected to report EPS of $0.43, down 53.26% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $20.22 billion, up 2.31% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.49 per share and revenue of $82.02 billion, which would represent changes of -3.86% and +2.4%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for T-Mobile. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 4.76% lower within the past month. T-Mobile currently has a Zacks Rank of #3 (Hold).

In terms of valuation, T-Mobile is currently trading at a Forward P/E ratio of 52.47. For comparison, its industry has an average Forward P/E of 20.76, which means T-Mobile is trading at a premium to the group.

Investors should also note that TMUS has a PEG ratio of 1.99 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TMUS's industry had an average PEG ratio of 2.09 as of yesterday's close.

The Wireless National industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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