T-Mobile ($TMUS) - Good Price & Good Company ? Better Than AT&T ?
My afterthoughts to Tiger_chat 's question of whether an investor profits from a good company or a good price ?
"Why not both" I asked myself ?
Wouldn't there be more upsides comparatively speaking ?
Having put the theory to test on different company types (see below for details); time to try it on a Telecommunications company ?
Testing $T-Mobile US(TMUS)$ & see if it fits the bill.
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- Chipotle Mex Grill
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- McDonalds
- United Parcel Services
- Spotify Inc
- Apple Inc
- Meta Platform (Facebook)
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- An American wireless network operator
- Its largest shareholder is Deutsche Telekom AG (48.4% stake)
- It is the 2nd largest wireless carrier in US with > 110 million subscribers as of end of Q2 2022
- Founded in 1994 as VoiceStream Wireless
- In 2001, Deutsche Telekom purchased and renamed it after its T-Mobile brand
- Provides wireless voice & data services in the US under brands (a) T-Mobile & (b) Metro by T-Mobile brands
- It was listed on Nasdaq on 01 May 2013 at $25 per share.
- In 2015, it was ranked #1 - American wireless carrier by Consumer Reports.
- On 01 Apr 2020, T-Mobile & Sprint Corporation completed their merger.
- The Sprint brand was officially erased on 02 Aug 2020.
- As part of the merger, T-Mobile US acquired Assurance Wireless, the service subsidized by the Lifeline Assistance program of the federal Universal Service Fund.
- It grew to its present size thru a series of strategic mergers & acquisitions
n 2022, a year where US market has been hammered by extreme volatility and ease of covid pandemic restrictions - how did T-Mobile fare ?
- Revenue came in at $20.27 Billion vs $20.78 Billion (Q4 2021); thats a -2.46% decline.
- Net income came in at $1.48 Billion vs $0.42 Billion, thats a +352.38% gain
- Earnings per share (diluted) was $1.18 vs $0.34 (Q4 2021); thats again a +347% gain
- Operating income came in at $2.75 Billion vs $1.06 Billion (Q4 2021); thats a +259% gain.
T-Mobile - Customer growth
- Like any companies with customers as its most important asset, the same applies to T-mobile.
- Its potential and future growth lies in its ability to retain existing customers and attract new ones.
- In Q4 2022, T-Mobile was able to grow its customer base to 113.6 Million customer vs 108 Million (Q4 2021); thats a +5.19% gain
- "Total Service" revenues came in at $15.52 Billion vs $14.96 Billion (Q4 2021); thats a +3.7% gain
- With "Postpaid Service" revenue registered a growth of +7% to $11.73 Billion; that constitute 75% of "Total Service" revenue.
T-Mobile - Other Highlights
- It maintains a very healthy churn rate of -18 bps. *note : Churn Rate refers the percentage of customers who close their contract or subscription with T-Mobile in Q4 2022
- For postpaid customer, it was able to grow its ARPU by +2%. *note : Average revenue per account (ARPA) is a profitability measure that assesses a company's revenue per customer account.
- For prepaid customer, its ARPA registered a slight decline by -3%.
T-Mobile's CEO on Q4 2022 Results
With record postpaid account and customer net adds that translated into industry-leading postpaid service and cash flow growth, T-Mobile absolutely smashed 2022 once again focusing on putting customers first. In true Un-carrier fashion, we have no plans to slow down in 2023. Now that we are being recognized as not nly the 5G leader but the clear overall network leader in the US, our differentiated and sustainable growth strategy is opening up even bigger pathways for our future.... T-Mobile, CEO, Mike Sievert....
Is T-Mobile A Good Price and Good Company ?
T-Mobile - Customers growth & retention
- T-Mobile is known for shaking up the US telecoms industry by thinking out of the box and giving what the customer wants
- Its customer service is second to none and its ability to not only retain but grow its customer base is legendary
- It is also said to be making inroads as the nation’s fastest growing home broadband provider, with 2 million customers added in year 2022, ending with a grand total of 2.6 million high speed internet customers
- With the push and adoption for 5G services gaining traction overtime, new services that could be provided to customers old & new could potentially become additional revenue streams (refer to below diagram)...
T-Mobile has better 5G coverage
- Do you think T-Mobile is the better of Top 3 telcos in the US ?
- Do you think T-Mobile is both a Good price & Good company to invest ?
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