T-Mobile’s Q4 Earnings Preview: Can It Keep Outpacing Wall Street’s Expectations?

• Analysts expect T-Mobile to deliver significant year-over-year earnings and revenue growth in the fourth quarter.
• Investors signaled concerns due to the “back-end loaded” nature of holiday results.
• T-Mobile has consistently outperformed its industry peers in earnings and revenue growth over the past year.

T-Mobile (TMUS) is gearing up to report its fourth-quarter earnings later this month  after a turbulent period caused by its CEO’s comments on holiday performances.

One of the leading wireless carriers, the company has consistently delivered strong financial performance, surpassing Wall Street’s expectations in three of the last four quarters.

Market Expectations for Q4

T-Mobile will announce its fiscal fourth-quarter earnings before the market opens on Jan. 29. Analysts project earnings per share (EPS) of $2.17, representing a 30% increase from the $1.67 reported in the same quarter last year.

The company has exceeded Wall Street’s EPS expectations  in three of the last four quarters. In the most recent quarter, it beat estimates by 10%.

For the whole of 2024, analysts expect an EPS of $9.31, a 34% jump from $6.93 in 2023.

According to TipRanks analysts , the consensus EPS forecast is $2.27, ranging between $1.98 and $2.47. In the previous quarter, the EPS was at $2.61.

Over the last year, TMUS has outperformed TipRanks’ EPS estimates 75% of the time, while the broader industry has done so 54% of the time.

On the revenue side, experts forecast sales of $21.40 billion, with estimates spanning $21.03 billion to $21.75 billion, up from $20.16 billion in the prior quarter.

Recent Shares Dip

T-Mobile is exiting a turbulent period. CEO Mike Sievert commented  during the last UBS Global Media and Communications Conference.

Sievert swiftly clarified  after the market interpreted his remarks as a warning about Q4 performance. He initially said the performance is usually slow during the holiday season, thus affecting the fourth-quarter results.

Some minutes after his words, TMUS stock collapsed . He clarified his remarks and emphasized that Q4 trends “were meeting or exceeding expectations.”

Sievert reiterated the company’s goal of adding 3 million postpaid phone customers this year.

Media highlighted  his mention of “back-end loaded” holiday results, sparking concerns about potential risks and causing T-Mobile’s stock to drop from $243 to under $229.

Sievert sought to reassure investors, raising the full-year outlook, including 5.6-5.8 million postpaid net customer additions and increased core earnings guidance.

T-Mobile remains optimistic  about growth from seasonal switching and new opportunities in business and government sectors but must now combat concerns stemming from its holiday season performance ahead of full-year results announcement.

T-Mobile Stock May Grow Further

TMUS shares have climbed by 35% over the past year, outperforming the S&P 500 26% rise but slightly trailing the Communication Services Select Sector SPDR ETF Fund  nearly 36% gain during the same period.

Analysts maintain a moderately optimistic stance  on T-Mobile stock, assigning it a “Moderate Buy” rating. Among the 27 analysts covering the stock, 17 rate it as a “Strong Buy.” Three think it’s a “Moderate Buy,” six a “Hold,” and one a “Strong Sell.”

This marks a slight dip in bullish sentiment compared to three months ago when 19 analysts rated it a “Strong Buy.”

Other 18 Wall Street analysts interviewed by TipRanks have issued 12-month price targets for T-Mobile at $242.33. Projections range from a high of $255.00 to a low of $220.00.

This average suggests a potential upside of 11% from the stock’s last trading price of $219.11.