Based on the provided data and recent analyst reports, here's a concise analysis of TMUS's valuation:
Valuation Analysis
TMUS appears overvalued based on multiple metrics. The stock's current PE ratio of 23.54x is significantly higher than its historical average, while its EV/EBITDA of 9.34x indicates premium pricing relative to industry standards.
Financial Performance
The company shows strong financial health with:
- Consistent revenue growth (Q3 2024: $20.16B)
- Improving net margins (15.17% in Q3 2024)
- Solid ROE of 16.09%
Analyst Sentiment
Recent analyst actions indicate growing concerns about valuation:
- Wells Fargo downgraded to Hold with $220 PT (Jan 6, 2025)
- RBC Capital downgraded to Hold with $240 PT (Jan 6, 2025)
- KeyBanc downgraded to Hold with $252 PT (Dec 12, 2024)
Intrinsic Value
According to DCF analysis, TMUS's intrinsic value is estimated at $139.52, suggesting the current price of $213.46 represents a -53% margin of safety.
Conclusion
TMUS is currently overvalued due to stretched valuation multiples, recent analyst downgrades, and trading significantly above its intrinsic value, despite strong underlying business performance.