T-Mobile (TMUS) plans to report its second-quarter earnings results on July 30. Analysts expect T-Mobile’s adjusted EPS to reach $0.97 in the second quarter compared to $0.92 in the second quarter of 2018. Analysts also expect T-Mobile to report adjusted EPS of $3.95 in 2019, $4.66 in 2020, and $5.43 in 2021.

In the first quarter, T-Mobile’s adjusted EPS increased by 35.9% YoY to reach $1.06. The company’s earnings were 16.5% more than what Wall Street analysts had anticipated for the first quarter of 2019. Its adjusted net income grew significantly, reaching $908 million in the first quarter of 2019 as compared with $671 million in the first quarter of 2018. In the first quarter of 2019, T-Mobile added 1.0 million net postpaid subscribers. This figure includes 656,000 postpaid phone subscriber net additions. Plus, T-Mobile also added 69,000 prepaid net customers. To learn more, read T-Mobile: Analyzing Its Q1 Earnings. In comparison, AT&T’s (T) adjusted EPS could fall 2.2% YoY to $0.89 in the second quarter. Wall Street analysts expect Sprint (S) to post adjusted EPS of -$0.04 in the first quarter of fiscal 2019, which ended on June 30.

What We Can Expect from T-Mobile’s Q2 Results

T-Mobile’s second-quarter revenue

Analysts expect T-Mobile to continue reporting YoY growth in its top line. In the second quarter, analysts expect T-Mobile to post total revenues of $11.1 billion, which represents 5.3% growth from $10.6 billion in the second quarter of 2018. In addition, analysts expect T-Mobile’s sales to rise 5.0% YoY to $45.5 billion in 2019, 4.5% YoY to $47.5 billion in 2020, and 5.3% YoY to $50.1 billion in 2021.

In the first quarter, T-Mobile reported total revenues of $11.1 billion, above analysts’ consensus estimate of $11.0 billion. The company’s revenues in the first quarter of 2019 rose 6.0% YoY from $10.5 billion in the first quarter of 2018. This increase was mainly due to 6.0% YoY growth in its service revenues to $8.3 billion in the first quarter of 2019 from $7.8 billion in the first quarter of 2018.

In comparison, analysts expect AT&T’s revenues to rise 15.0% YoY to $44.8 billion in the second quarter. Analysts expect Sprint’s revenues to fall 0.8% YoY to $8.1 billion in the first quarter of fiscal 2019, which ended on June 30.

What We Can Expect from T-Mobile’s Q2 Results

What We Can Expect from T-Mobile’s Q2 Results

T-Mobile’s EBITDA growth

For the second quarter, analysts expect that T-Mobile will report adjusted EBITDA of $3.4 billion. Analysts expect T-Mobile’s second-quarter adjusted EBITDA to rise 3.9% YoY from $3.2 billion in the second quarter of 2018.

In the first quarter, T-Mobile reported adjusted EBITDA of $3.3 billion, which represents 11.1% growth from $3.0 billion in the first quarter of 2018. The growth in the adjusted EBITDA was mainly due to higher service revenues. T-Mobile’s adjusted EBITDA margin increased to 40% in the first quarter of 2019 from 38% in the first quarter of 2018.

AT&T’s consolidated adjusted EBITDA could rise 13.1% YoY to $15.1 billion in the second quarter. On the other hand, analysts expect Sprint’s consolidated adjusted EBITDA to fall 11.6% YoY to $2.9 billion in the quarter.

T-Mobile’s service revenues

Service revenue is the stable revenue stream that is common to mobile operators. In the second quarter, analysts expect T-Mobile’s wireless service revenue to rise 6.4% YoY to $8.4 billion.

In the first quarter, T-Mobile’s wireless service revenues rose 6.0% YoY to $8.3 billion due to the growth in its branded postpaid revenues. T-Mobile’s service revenues in the postpaid segment rose 8.3% YoY to $5.5 billion in the first quarter. The company’s service revenues in the prepaid segment fell 0.7% YoY to $2.4 billion.

In comparison, AT&T’s wireless service revenue from its combined domestic operations is expected to rise 2.2% YoY to $14.0 billion in the second quarter. Sprint’s service revenue from its wireless segment is expected to fall 3.2% YoY to $5.3 billion in the quarter.

Shareholder returns and stock trends

T-Mobile has delivered a return of 24.7% year-to-date as of July 15. AT&T and Sprint have risen 18.1% and 22.2%, respectively. On July 15, T-Mobile’s closing price was $79.31 per share. The stock is trading 37.0% above its 52-week low of $57.89 per share and 2.0% below its 52-week high of $80.93 per share.

T-Mobile’s stock price has risen 4.9% in the last five trading days, 5.9% in the trailing one-month period, and 28.6% in the trailing 12-month period. Analysts’ estimates show that the stock could rise 4.7% over the next 12 months.

Currently, T-Mobile’s market cap is $67.8 billion. It’s the third-largest US national wireless carrier in terms of market cap. AT&T’s market cap is $246.0 billion, while Sprint’s market cap is $29.0 billion.

Bollinger Band

On July 15, T-Mobile stock closed at $79.31, which is near its upper Bollinger Band level of $79.88. This value suggests that its stock is overbought.

MACD

T-Mobile’s current 14-day MACD (moving average convergence divergence) is 3.07. AT&T’s 14-day MACD is 0.07, and Sprint’s 14-day MACD is 0.18. A stock’s MACD marks the change between its long- and short-term moving averages. T-Mobile’s positive MACD number suggests an upward trading trend.

T-Mobile’s valuation multiple

Currently, T-Mobile is trading at a 12-month forward PE ratio of 18.19x. It’s trading at 20.14x analysts’ 2019 adjusted EPS estimate of $3.94 and 17.02x analysts’ 2020 adjusted EPS estimate of $4.66. Analysts expect the company’s adjusted EPS to rise 17.3% in 2019 and 18.3% in 2020. A company’s PE ratio represents the amount investors are willing to pay per dollar of its EPS.

T-Mobile is currently trading at a trailing-12-month EV-to-EBITDA (enterprise value-to-EBITDA) ratio of 7.96x. Sprint and AT&T are trading at trailing-12-month EV-to-EBITDA multiples of 4.85x and 7.00x, respectively. T-Mobile is trading at a 12-month forward EV-to-EBITDA multiple of 7.19x. AT&T’s and Sprint’s 12-month forward EV-to-EBITDA ratios are 7.02x and 5.25x, respectively.

Moving averages

As of the July 15 closing, T-Mobile stock is at $79.31 per share, meaning it is 7.3% above its 100-day moving average of $73.92, 4.8% above its 50-day moving average of $75.65, and 4.2% above its 20-day moving average of $76.12. AT&T was trading 6.4% above its 100-day moving average, while Sprint was trading 11.6% above its 100-day moving average.

Relative strength index

On July 15, T-Mobile’s 14-day RSI (relative strength index) score stood at 64, which implies that the company’s stock was neither oversold nor overbought. AT&T and Sprint’s 14-day RSI scores stood at 61 and 56, respectively.

A stock’s RSI score is measured on a scale of zero to 100, with below 30 suggesting the oversold status, and above 70 suggesting the overbought status.

Short interest ratio

As of July 15, T-Mobile’s short interest ratio was about 3.28%. The ratio denotes the number of shares sold short and not covered back yet. A stock’s short interest ratio of greater than 40% suggests that traders and investors foresee a fall in the stock’s price.

Analysts’ recommendations

Most of the analysts maintained a “buy” on T-Mobile stock. 85.7% of the 21 analysts that follow the stock have given it a “buy” rating, while 14.3% are in favor of a “hold” rating. None of the analysts have a “sell” rating. On average, analysts have given T-Mobile a 12-month price target of $83.00, which implies a rise of 4.7% from its stock price of $79.31.

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