T-Mobile (TMUS) plans to report its second-quarter earnings results on July 30. Analysts expect T-Mobile’s adjusted EPS to reach $0.97 in the second quarter compared to $0.92 in the second quarter of 2018. Analysts also expect T-Mobile to report adjusted EPS of $3.95 in 2019, $4.66 in 2020, and $5.43 in 2021.

In the first quarter, T-Mobile’s adjusted EPS increased by 35.9% YoY to reach $1.06. The company’s earnings were 16.5% more than what Wall Street analysts had anticipated for the first quarter of 2019. Its adjusted net income grew significantly, reaching $908 million in the first quarter of 2019 as compared with $671 million in the first quarter of 2018. In the first quarter of 2019, T-Mobile added 1.0 million net postpaid subscribers. This figure includes 656,000 postpaid phone subscriber net additions. Plus, T-Mobile also added 69,000 prepaid net customers. To learn more, read T-Mobile: Analyzing Its Q1 Earnings. In comparison, AT&T’s (T) adjusted EPS could fall 2.2% YoY to $0.89 in the second quarter. Wall Street analysts expect Sprint (S) to post adjusted EPS of -$0.04 in the first quarter of fiscal 2019, which ended on June 30.

What We Can Expect from T-Mobile’s Q2 Results

T-Mobile’s second-quarter revenue

Analysts expect T-Mobile to continue reporting YoY growth in its top line. In the second quarter, analysts expect T-Mobile to post total revenues of $11.1 billion, which represents 5.3% growth from $10.6 billion in the second quarter of 2018. In addition, analysts expect T-Mobile’s sales to rise 5.0% YoY to $45.5 billion in 2019, 4.5% YoY to $47.5 billion in 2020, and 5.3% YoY to $50.1 billion in 2021.

In the first quarter, T-Mobile reported total revenues of $11.1 billion, above analysts’ consensus estimate of $11.0 billion. The company’s revenues in the first quarter of 2019 rose 6.0% YoY from $10.5 billion in the first quarter of 2018. This increase was mainly due to 6.0% YoY growth in its service revenues to $8.3 billion in the first quarter of 2019 from $7.8 billion in the first quarter of 2018.

In comparison, analysts expect AT&T’s revenues to rise 15.0% YoY to $44.8 billion in the second quarter. Analysts expect Sprint’s revenues to fall 0.8% YoY to $8.1 billion in the first quarter of fiscal 2019, which ended on June 30.

What We Can Expect from T-Mobile’s Q2 Results

T-Mobile’s EBITDA growth

For the second quarter, analysts expect that T-Mobile will report adjusted EBITDA of $3.4 billion. Analysts expect T-Mobile’s second-quarter adjusted EBITDA to rise 3.9% YoY from $3.2 billion in the second quarter of 2018.

In the first quarter, T-Mobile reported adjusted EBITDA of $3.3 billion, which represents 11.1% growth from $3.0 billion in the first quarter of 2018. The growth in the adjusted EBITDA was mainly due to higher service revenues. T-Mobile’s adjusted EBITDA margin increased to 40% in the first quarter of 2019 from 38% in the first quarter of 2018.

AT&T’s consolidated adjusted EBITDA could rise 13.1% YoY to $15.1 billion in the second quarter. On the other hand, analysts expect Sprint’s consolidated adjusted EBITDA to fall 11.6% YoY to $2.9 billion in the quarter.

T-Mobile’s service revenues

Service revenue is the stable revenue stream that is common to mobile operators. In the second quarter, analysts expect T-Mobile’s wireless service revenue to rise 6.4% YoY to $8.4 billion.

In the first quarter, T-Mobile’s wireless service revenues rose 6.0% YoY to $8.3 billion due to the growth in its branded postpaid revenues. T-Mobile’s service revenues in the postpaid segment rose 8.3% YoY to $5.5 billion in the first quarter. The company’s service revenues in the prepaid segment fell 0.7% YoY to $2.4 billion.

In comparison, AT&T’s wireless service revenue from its combined domestic operations is expected to rise 2.2% YoY to $14.0 billion in the second quarter. Sprint’s service revenue from its wireless segment is expected to fall 3.2% YoY to $5.3 billion in the quarter.

Shareholder returns and stock trends

T-Mobile has delivered a return of 24.7% year-to-date as of July 15. AT&T and Sprint have risen 18.1% and 22.2%, respectively. On July 15, T-Mobile’s closing price was $79.31 per share. The stock is trading 37.0% above its 52-week low of $57.89 per share and 2.0% below its 52-week high of $80.93 per share.

T-Mobile’s stock price has risen 4.9% in the last five trading days, 5.9% in the trailing one-month period, and 28.6% in the trailing 12-month period. Analysts’ estimates show that the stock could rise 4.7% over the next 12 months.

Currently, T-Mobile’s market cap is $67.8 billion. It’s the third-largest US national wireless carrier in terms of market cap. AT&T’s market cap is $246.0 billion, while Sprint’s market cap is $29.0 billion.

Bollinger Band

On July 15, T-Mobile stock closed at $79.31, which is near its upper Bollinger Band level of $79.88. This value suggests that its stock is overbought.

MACD

T-Mobile’s current 14-day MACD (moving average convergence divergence) is 3.07. AT&T’s 14-day MACD is 0.07, and Sprint’s 14-day MACD is 0.18. A stock’s MACD marks the change between its long- and short-term moving averages. T-Mobile’s positive MACD number suggests an upward trading trend.

T-Mobile’s valuation multiple

Currently, T-Mobile is trading at a 12-month forward PE ratio of 18.19x. It’s trading at 20.14x analysts’ 2019 adjusted EPS estimate of $3.94 and 17.02x analysts’ 2020 adjusted EPS estimate of $4.66. Analysts expect the company’s adjusted EPS to rise 17.3% in 2019 and 18.3% in 2020. A company’s PE ratio represents the amount investors are willing to pay per dollar of its EPS.

T-Mobile is currently trading at a trailing-12-month EV-to-EBITDA (enterprise value-to-EBITDA) ratio of 7.96x. Sprint and AT&T are trading at trailing-12-month EV-to-EBITDA multiples of 4.85x and 7.00x, respectively. T-Mobile is trading at a 12-month forward EV-to-EBITDA multiple of 7.19x. AT&T’s and Sprint’s 12-month forward EV-to-EBITDA ratios are 7.02x and 5.25x, respectively.

Moving averages

As of the July 15 closing, T-Mobile stock is at $79.31 per share, meaning it is 7.3% above its 100-day moving average of $73.92, 4.8% above its 50-day moving average of $75.65, and 4.2% above its 20-day moving average of $76.12. AT&T was trading 6.4% above its 100-day moving average, while Sprint was trading 11.6% above its 100-day moving average.

Relative strength index

On July 15, T-Mobile’s 14-day RSI (relative strength index) score stood at 64, which implies that the company’s stock was neither oversold nor overbought. AT&T and Sprint’s 14-day RSI scores stood at 61 and 56, respectively.

A stock’s RSI score is measured on a scale of zero to 100, with below 30 suggesting the oversold status, and above 70 suggesting the overbought status.

Short interest ratio

As of July 15, T-Mobile’s short interest ratio was about 3.28%. The ratio denotes the number of shares sold short and not covered back yet. A stock’s short interest ratio of greater than 40% suggests that traders and investors foresee a fall in the stock’s price.

Analysts’ recommendations

Most of the analysts maintained a “buy” on T-Mobile stock. 85.7% of the 21 analysts that follow the stock have given it a “buy” rating, while 14.3% are in favor of a “hold” rating. None of the analysts have a “sell” rating. On average, analysts have given T-Mobile a 12-month price target of $83.00, which implies a rise of 4.7% from its stock price of $79.31.

Latest articles

On September 14, drones attacked Saudi Arabia Aramco's oil-infrastructure. Saudi Arabia's oil production has fallen by 50%.

Apple Arcade (AAPL) is a subscription gaming service that was unveiled at Apple’s annual event last week. The service will launch on September 19.

Cannabis legalization is gaining traction not only in the US but also globally. The third presidential Democratic debate was held on September 12.

Google has agreed to make a one-time settlement of over $945 million euros to the French ministry. The ministry accused Google of evading taxes.

In Q4 2018, legendary investor George Soros sold all his holding in Apple (AAPL). In Q3 2018, Apple represented around 0.2% of his total portfolio.

Jim Chanos, the founder and president of Kynikos Associates, is a long-time short-seller of Tesla stock. Tesla stock has fallen 17.5% in the last year.