T-Mobile Stock Gets A Lift As Subscriber Growth Holds Steady

Scotiabank analyst Maher Yaghi upgraded T-Mobile US TMUS from Sector Perform to Sector Outperform and raised the price target to $277.50 from $275. The stock traded higher Wednesday following the call.

Despite earlier fears of a slowdown in the U.S. wireless market, recent earnings from mobile operators and cable companies show industry loading remains healthy, with an annual run rate of about 8.5 million.

Yaghi called last week's 10% drop in T-Mobile shares an overreaction. He emphasized that T-Mobile's share of phone net adds is consistent with its four-year average, indicating steady performance.

Also Read: T-Mobile Beats Estimates, But Customer Growth Leaves Investors Wanting More, Says Analyst

The analyst downgraded the stock a few months back due to valuations, but the scenario is different today. Valuations are supportive; hence, the stock was upgraded with a slightly increased target due to higher estimates.

Earlier this year, T-Mobile peers commented that the US wireless market was seeing a slow start. Yaghi noted that the US market should see phone subscriber growth of 1.5-2% annually in 2025.

T-Mobile’s share of phone net adds was 35% in the first quarter of 2025. That’s the same as the first quarter of 2024 and in line with the four-year average of 36% for the first quarter. This shows consistency in loading within a very dynamic market.

The analyst expects loading at T-Mobile US to accelerate as the year progresses, similar to normal seasonality. The company’s financial guidance actually provides a great hint that management expects strong loading in the second half.

In the first quarter, core adjusted EBITDA growth was 8%, while guidance implies that growth will decelerate. Some of that deceleration in growth is due to increased investments in AI and customer service, but also, very importantly, higher loading costs to support the company’s highest-ever annual postpaid guide. In summary, Yaghi noted that the path for growth in front of T-Mobile US has not diminished.

Yaghi projected second-quarter of $20.81 billion and EPS of $2.63.

Price Action: T-Mobile US stock is up 2.19% to $246.88 at last check Wednesday.

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