T-Mobile US Stock: Join the Rally at a 22% Discount
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 -6.6% so far this year, but the silver lining is that it is now 22% cheaper based on its P/S (Price-to-Sales) ratio compared to 1 year ago.
The stock may not reflect it yet, but here is what’s going well for the company. T-Mobile continues to demonstrate strong operational efficiency, evidenced by record customer growth in Q3 2025, including 2.3 million total postpaid net additions and 1.0 million postpaid phone net additions. This momentum, also seen in 560 thousand new broadband customers, has driven service revenue growth of 9% year-over-year in Q3 2025. Management recently increased its 2025 guidance for total postpaid net customer additions to 7.2-7.4 million. The company is actively adjusting its pricing strategies, introducing a “Better Value” plan in January 2026 with a five-year price-lock guarantee to attract and retain families amidst market competition. While a modest fee adjustment was announced, the focus remains on customer acquisition and expanding offerings to new segments.
- What Does 2026 Have In Store For T-Mobile Stock?
- High Margins, 17% Discount: Buy T-Mobile US Stock Now
- Ten-Year Tally: T-Mobile US Stock Delivers $63 Bil Gain
- How Will T-Mobile Stock React To Its Q3 Earnings?
- T-Mobile US Stock Has Returned $59 Bil To Shareholders In A Decade
- TMUS Delivers $59 Bil to Shareholders Over the Last 10 Years
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 P/S multiple of 2.5, TMUS stock is available at a 22% discount vs 1 year ago.
Below is a quick comparison of TMUS fundamentals with S&P medians.
| TMUS | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Wireless Telecommunication Services | – |
| PS Ratio | 2.5 | 3.3 |
| PE Ratio | 18.0 | 24.1 |
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| LTM* Revenue Growth | 7.3% | 6.4% |
| 3Y Average Annual Revenue Growth | 2.4% | 5.7% |
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| LTM* Operating Margin | 22.6% | 18.8% |
| 3Y Average Operating Margin | 20.3% | 18.4% |
| LTM* Op Cash Flow Margin | 31.3% | 20.5% |
| 3Y Average Op Cash Flow Margin | 27.1% | 20.1% |
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| DE Ratio | 56.5% | 20.1% |
*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:
- Greater than $10 Bil in market cap
- High CFO (cash flow from operations) margins or operating margins
- 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:
Notably, a portfolio that was built starting 12/31/2016 with stocks that fulfil 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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