Last week, T-Mobile (TMUS) disclosed a security breach that affected some of its prepaid wireless customers in the US. According to the telecom company, a hacker got unauthorized access to customer records. And these records included customer names, account numbers, billing addresses, phone numbers, rate plans, and calling features.
TechCrunch reported that the cyber attack might have hit accounts of less than 1.5% of T-Mobile’s 75 million customers, or about 1 million people. Since it quickly discovered the incident, T-Mobile stated that the breach didn’t affect any financial data, passwords, or social security numbers.
According to a CNET report, “T-Mobile suffered a similar data breach last year when names, phone numbers and account information for about 2 million customers was also exposed. In that case, however, T-Mobile said that encrypted passwords had also been exposed.”
This most recent security flaw emerged as T-Mobile was making efforts to strengthen its subscriber base. The company has added more than 1 million subscribers every quarter for the last 26 quarters. In Q3 of 2019, the company’s net customer base increased by 1.7 million, ending the quarter with a subscriber base of 84.2 million.
In April 2018, T-Mobile announced its plans to merge with Sprint for about $26.5 billion. The merger has conditional approval from the Justice Department and the FCC. The combined company agreed to divest certain wireless assets to Dish Network (DISH) for $5 billion. After the deal goes through, Dish is expected to be the fourth-largest US wireless carrier. The two merging companies also promised to deploy a 5G network rapidly across America.
However, the T-Mobile–Sprint merger faces a lawsuit filed by various state attorneys general on antitrust concerns. California and New York are leading this multistate lawsuit. The states argue that the combination of the third- and fourth-largest wireless carriers would harm US wireless consumers. A court hearing is scheduled to begin on December 9.
T-Mobile’s Q3 earnings
T-Mobile beat analysts’ consensus earnings estimates in the third quarter. It reported an adjusted EPS of $1.01 per share—which was 8.6% higher than in Q3 of 2018. The company’s revenues came in at $11.1 billion, an increase of 2.0% year-over-year. For 2019, Wall Street expects T-Mobile to report a net income of $3.5 billion, which represents about 19.8% growth year-over-year.
In the third quarter, T-Mobile added 754,000 postpaid phone net customers despite intense competition in the wireless industry. Comparatively, AT&T added 101,000 postpaid phone net customers. Meanwhile, Sprint reported 91,000 net losses.
T-Mobile also reported a record-low third-quarter postpaid phone churn rate of 0.89%, compared to 1.02% in the third quarter of 2018. Its Q3 2019 postpaid phone churn rate was lower than AT&T and Sprint.
Analysts recommendations for T-Mobile stock
T-Mobile stock currently offers a potential upside of about 14.2% for the next 12 months. Wall Street analysts gave it a mean price target of $89.74 against its current market price of $78.59.
Analysts look largely bullish on TMUS stock. Among the total 21 analysts covering T-Mobile, 16 recommend a “buy,” five recommend a “hold,” and none recommend a “sell.”
T-Mobile stock rose about 1.2% on November 22 and closed the trading day at $78.59. It was trading 7.8% below its 52-week high of $85.22. The stock hit a 52-week high on July 26 after the Justice Department signed off on the pending merger between T-Mobile and Sprint. Since then, T-Mobile has been trending sideways, as the merger’s future is uncertain.
Based on T-Mobile’s closing price on November 22, it reported returns of 0.7% in the last five trading days, -3.8% in the trailing month, and 17.7% in the trailing 12 months. The stock reported returns of 23.6% year-to-date. AT&T stock is up 32.3% while Sprint is down 1.4%, meanwhile.
On November 22, T-Mobile closed 1.7% below its 20-day moving average of $79.94 and 1.4% below its 50-day moving average of $79.71. It was also trading 0.5% below its 100-day moving average of $78.99. T-Mobile’s current stock price is below its moving averages, which suggests bearish sentiment.
Finally, T-Mobile’s 14-day MACD is -0.98, which suggests a downward trading pattern. The stock’s 14-day relative strength index score of 46 suggests that it’s neither oversold nor overbought. On November 22, it closed near its middle Bollinger Band level of $79.94, which also suggests that it’s neither oversold nor overbought.
Check out T-Mobile’s New Initiatives Don’t Address Antitrust Issues and T-Mobile CEO John Legere Is Stepping Down to learn more about this telecom giant.