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Analyzing T-Mobile’s Valuation Multiples in December

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T-Mobile’s scale

On December 6, 2017, T-Mobile’s (TMUS) market capitalization was ~$51.7 billion, making it the third-largest US wireless company in terms of market cap.

In comparison, Verizon (VZ) had a market capitalization of ~$206.7 billion, AT&T’s (T) market capitalization was ~$221.7 billion, and Sprint’s (S) market capitalization was ~$22.8 billion.

Bollinger Band

In the December 6 trading session, T-Mobile stock closed at $62.12, near its upper Bollinger Band level of $64.13. This suggests that T-Mobile stock is overbought, and investors could take it as a “sell” signal.

Short interest ratio

On December 6, 2017, T-Mobile’s short interest as a percentage of its float (or short interest ratio) was ~4.7%. Generally, if the stock’s short interest ratio is greater than 40.0%, it suggests that traders and investors anticipate a fall in the stock’s price.

T-Mobile’s valuation metrics

On December 6, 2017, T-Mobile was trading at a forward EV-to-EBITDA[1. enterprise value to earnings before interest, taxes, depreciation, and amortization] multiple of ~6.9x. In comparison, AT&T, Sprint, and Verizon had forward EV-to-EBITDA multiples of ~6.4x, ~4.6x, and ~6.9x, respectively.

On December 6, 2017, T-Mobile was trading at a forward price-to-earnings (or PE) multiple of ~22.9x. AT&T, Sprint, and Verizon had forward PE multiples of ~12.4x, ~194.5x, and ~13.1x, respectively.

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