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T-Mobile’s Valuation Compared to Its Peers

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Mar. 28 2019, Published 12:34 p.m. ET

T-Mobile’s scale

The market capitalization for T-Mobile (TMUS) stock was $61.4 billion on March 27. Verizon (VZ), AT&T (T), and Sprint (S) had market capitalizations of $251.6 billion, $228.7 billion, and $24.6 billion, respectively, on March 27. The market capitalization represents a company’s market value—its outstanding shares multiplied by its stock price.

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Forward EV-to-EBITDA multiple

On March 27, T-Mobile had a trailing 12-month EV-to-EBITDA multiple of 7.66x—compared to its closest peers. Verizon, Sprint, and AT&T had trailing 12-month EV-to-EBITDA multiples of 7.67x, 4.62x, and 7.03x, respectively. On March 27, T-Mobile was trading at a 12-month forward EV-to-EBITDA ratio of 6.86x. Verizon, AT&T, and Sprint had 12-month forward EV-to-EBITDA multiples of 7.45x, 6.77x, and 4.43x, respectively.

Forward PE ratio

A company’s PE ratio tells us the amount investors are willing to pay per dollar of the EPS. On March 27, T-Mobile was trading at a 12-month forward PE ratio of 17.83x. Verizon, AT&T, and Sprint had 12-month forward PE ratios of 12.98x, 8.75x, and 137.77x, respectively.

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