T-Mobile: The Best Wireless Carrier Stock to Own Right Now?

Key Points

• T-Mobile US is the nation’s third-largest wireless carrier, adding over three million new customers for a third straight year in 2024.
• T-Mobile posted many of the industry's best metrics for Q4 and 2024, including net customer additions of 1.9 million in Q4 and 6.1 million in 2024 and net high-speed internet customers addition of 428,000 in Q4 and 1.7 million in 2024.
• The company posted its highest diluted EPS in 2024.

The wireless industry is maturing in the computer and technology sector. Leaders like Verizon Communications Inc. NYSE: VZ and AT&T Inc. NYSE: T are showing barely any growth at 1.1% and 1.7% YoY, respectively. However, the third-largest wireless carrier in the United States is still posting impressive year-over-year (YoY) revenue growth at 6.8%. T-Mobil US Inc. NASDAQ: TMUS continues to fire on all pistons, hitting the new industry’s best milestones in its fourth quarter of 2024 results. The stock trades at nearly 23x forward earnings but deserves a premium as its five-year annualized growth rate still outshines its peers at 22.2%.

The ”Un-Carrier” Breaks Posts Industry Best Results

T-Mobile branded itself as the “Un-Carrier,” proclaiming to be a disruptor in the wireless industry since 2013. It popularized no annual contracts, no termination fees, straightforward pricing, and many customer-centric initiatives that forced major wireless carriers to follow suit. The company has remained focused on its core offerings and has continued to serve customers and investors well.

The company posted the fourth quarter of 2024 EPS of $2.57, beating consensus estimates by 28 cents. Revenues rose 6.8% YoY to $21.87 billion, crushing the $21.33 billion consensus estimates. The company posted a number of the best metrics in the industry, including:

• Postpaid net account additions of 263,000 in Q4 and 1.1 million in 2024.
• Postpaid net customer additions of $1.9 million in Q4 and 6.1 million in 2024.
• Postpaid phone net customer additions of 903,000 in Q4 and 3.1 million in 2024.
• Postpaid phone churn of 0.92% in Q4 and $0.86% in 2024.
• High-speed internet net customer additions of 428,000 in Q4 and 1.7 million in 2024.

T-Mobile generated a record net income of $3 billion in Q4 and $11.3 billion in 2024, which was the highest full year in the company’s history. The full-year EPS of $9.66 billion was its highest full-year ever. The company repurchased $11.1 billion in common stock in 2024 and paid out $3.3 billion in cash dividends. An additional $14 billion was added to the stock buyback program through 2025.

Upbeat CEO Comments During Conference Call

During the conference call, T-Mobile US CEO Mike Sievert was upbeat about the “monster Q4” results. Q4 was its third straight year of adding more than three million postpaid phone net additions. In fact, 2024 was T-Mobile’s greatest growth year ever across many metrics. Over 60% of new customers selected their premium plans. They also delivered the company’s highest YoY broadband average revenue per user (ARPU) growth.

Sievert insisted the company is firing on all pistons, “We are gaining share rapidly in smaller markets in rural areas, an area that represents more than 40% of the country. We're having, experiencing our best quarters ever and gaining share rapidly in T-Mobile for business fueled by all kinds of things, including our ground-breaking T-Priority offer and other related 5G advanced services like network slicing capabilities that are now starting to demonstrate that they allow us to unlock market share gains in highly CLV positive ways.” CLV is the acronym for customer lifetime value, the metric that estimates the total revenue the company can expect from a single customer.

TMUS Stock Forms a Cup Pattern

A cup and handle pattern is comprised of two separate patterns: a cup and a handle. The cup is formed as a stock peaks a swing high, marking the lip line as shares fall to a swing low, form a rounding bottom, and rally back to retest the cup lip line. After the cup pattern is complete, the stock rejects again from the lip line to form a shallow pullback before turning back up again to retest the cup lip line, forming the handle. The cup and handle breakout occurs if the stock can break out above the cup lip line on the handle bounce and in the third attempt.

TMUS formed the cup lip line at the swing high of $248.15 on Nov. 27, 2024, before shares sold off to the swing low of $208.25 on Jan. 6, 2024. A rounding bottom formed heading into its earnings report and subsequent gap to the $233.23 upper channel. The daily anchored VWAP is $220.28. TMUS peaked at the $241.43 Fib before retesting the upper gap fill channel support. The daily RSI is slipped at the 65-band. Fibonacci (Fib) pullback support levels are at $228.53, $223.43, $216.73, and $208.25.

TMUS stock’s average consensus price target is 6.66% higher at $248.89, and its highest analyst price target sits at $280.00. It has 14 analysts' Buy ratings and seven Hold Ratings. The stock has a 3.16% short interest.

Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered call at upside Fib levels executes a wheel strategy for income on top of its 1.51% dividend yield.