High Margins, 17% Discount: Buy T-Mobile US Stock Now

T-Mobile US (TMUS) stock might be a good buy now. Why? Because you get high margins – reflective of pricing power and cash generation capacity – for a discounted price. Companies like this generate consistent, predictable profits and cash flows, which reduce risk and allow capital to be reinvested. The market tends to reward that.

What Is Happening With TMUS

TMUS may be down -1.1% so far this year, but the silver lining is that it is now 17% cheaper based on its P/S (price-to-sales) ratio compared to a year ago.

The stock may not reflect it yet, but here is what’s going well for the company: T-Mobile continues to expand its customer base significantly, adding 2.3 million postpaid net customers in Q3 2025, a record. Over 60% of new customers are selecting premium plans, driving average revenue per account (ARPA) up over 5% in Q2 2025. This pricing power is complemented by leadership in 5G fixed wireless access, with nearly 8 million subscribers by December 2025, and expansion into fiber and satellite connectivity through T-Fiber and T-Satellite. Management projects increased 2026-2027 guidance and a $1.5 billion tax benefit for 2026.

TMUS Has Strong Fundamentals

• Recent Profitability: Nearly 31.3% operating cash flow margin and 22.6% operating margin LTM.
• Long-Term Profitability: About 27.1% operating cash flow margin and 20.3% operating margin last 3-year average.
• Revenue Growth: T-Mobile US saw growth of 7.3% LTM and 2.4% last 3-year average, but this is not a growth story
• Available At Discount: At a P/S multiple of 2.6, TMUS stock is available at a 17% discount vs. 1 year ago.

Below is a quick comparison of TMUS fundamentals with S&P medians.

*LTM: Last Twelve Months

Don’t Expect A Slam Dunk, Though

While TMUS stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. TMUS has seen some serious dips despite its strengths. During the Global Financial Crisis, it dropped about 85%, way deeper than usual. The 2018 correction saw a nearly 19% decline, while the Covid pandemic pushed it down around 26%. The inflation shock in 2022 wasn’t kind either, with a drop of almost 32%. So even solid companies like TMUS aren’t immune when the market turns. Drawdowns like these remind you risk is always there, no matter how favorable the outlook. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read TMUS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

If you want more details, read Buy or Sell TMUS Stock.

How We Arrived At TMUS Stock

TMUS piqued our interest because it meets the following criteria:

1. Greater than $10 billion in market cap
2. High CFO (cash flow from operations) margins or operating margins
3. Meaningfully declined in valuation over the past 1 year

But if TMUS doesn’t look good enough to you, here are other stocks that also check all these boxes:

1. Visa (V)
2. ServiceNow (NOW)
3. Adobe (ADBE)

Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfill the criteria above would have performed as follows:

• Average 12-month forward returns of nearly 19%
• 12-month win rate (percentage of picks returning positive) of about 72%

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