On Thursday, Oppenheimer demonstrated confidence in T-Mobile US (NASDAQ:TMUS) by increasing the stock's price target to $250 from $215, while retaining an Outperform rating. The firm's analysis highlighted T-Mobile's impressive performance, noting a service revenue growth of 5.1%, which surpassed their estimate of 4.9%. This growth was attributed to the highest Average Revenue Per Account (ARPA) increase in seven years at 4.1%, along with a significant addition of postpaid phone net subscribers, adding 865,000 which exceeded expectations by 65,000.
The company's consolidated revenue growth accelerated to 4.7%, marking the first time equipment revenues have been positive since the first half of 2021. The core EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also saw a substantial year-over-year increase of 8.9%, reaching $8.2 billion, which outperformed the $7.9 billion estimate. Furthermore, T-Mobile's profit margins expanded by 160 basis points.
The report also mentioned T-Mobile's success in Fixed Wireless Access (FWA) subscriptions, with an addition of 415,000 subscribers, slightly above forecasts. This achievement has brought T-Mobile's total FWA subscriber base to 6 million, which is half of its target for the year 2028. T-Mobile's performance has been strong, as the company continues to capture a significant share of subscribers in both the mobile and broadband markets, propelled by its superior network and competitive pricing strategies.
The firm emphasized T-Mobile's consistent achievement of its short-term and long-term objectives, solidifying the carrier's position as the preferred choice within the communications sector. This optimistic outlook from Oppenheimer underscores T-Mobile's robust operational results and its potential for continued growth in the telecommunications industry.
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