How Sensitive Is T-Mobile’s Valuation To Changes In Its Postpaid Market Share?

T-Mobile’s (NYSE:TMUS) impressive growth in the postpaid phone space has helped the company more than triple its stock price over the last five years. The carrier’s postpaid phone market share, as a percentage of the overall U.S. wireless market, has grown from around 7% in 2012 to about 10% in 2017 and the company has consistently led the industry in terms of postpaid subscriber adds, driven by innovative packaging of wireless plans (installment plans, no contracts, attractive value-added offerings) and some clever marketing. The carrier has projected postpaid net adds of 3.3 to 3.6 million subscribers for 2017.

We have created an interactive model that details how changes in T-Mobile’s postpaid wireless market share could impact the company’s market price. You can modify assumptions such as earnings multiples, margins, monthly ARPU and others to see the dynamics of the market share/market price sensitivity change. While postpaid phone subscriber growth is slowing down, amid increasing saturation, T-Mobile does have avenues to improve market share. For instance, the company’s growing low band spectrum position will allow it to improve its reach in rural and suburban areas, while its fast-growing retail footprint could also help with customer acquisition (related: Why T-Mobile Is Aggressively Expanding Its Retail Footprint).