T-Mobile US Inc. (NASDAQ: TMUS) has confirmed that it will release its Q3 earnings results on November 2, 2021, after Market close.
What to look for
T-Mobile has an impressive earnings surprise trend, and currently, it is poised to produce another quarterly beat when it reports Q3 2021 earnings. The company will benefit from solid postpaid client gains, and service revenue will contribute to solid Q3 2021 results.
Earnings: Stockearning’s Estimated EPS is expected to be more than last quarter's $0.78 per share. Historical EPS Performance shows that the company has topped EPS estimates in 12 quarters (100%) out of the past 12 quarters. In the last quarter, the company reported EPS of $0.78 versus estimates of $0.52, representing a 50% surprise.
In Q2, the company reported a $20 billion up 13% YoY with service revenue up 10% YoY to $14.5 billion, driven by higher wholesale revenues and continued customer growth. Following the exceptional Q2 results, the company raised its 2021 outlook for the second consecutive quarter. The company expects net customer addition of 5 to 5.3 million, up from the previous guidance of 4.4-4.9 million. As a result, core adjusted EBITDA will be between $23 billion and $23.3 billion.
Stock Movement: T-Mobile's share price has been DOWN 15.7% since the last earnings release. Over the past 36 quarters, TMUS shares were UP on 24 occasions. So, the historical price reaction suggests a 66% probability of the stock going UP after the Q3 earnings release. According to the Stockearning algorithm, the predicted first-day move is 3%, while the predicted move on the seventh day is 4%.
What analysts are saying
Deutsche Bank analyst Bryan Krafts has lowered his price target in the stock from $195 to $185 but maintained his “Buy” rating on the stock. The reduced target shows a conservative view on T-Mobile outlook after a recent management commentary at an investor conference. But, the analyst believes that the current share price represents an "attractive opportunity and the competitive concerns are over done."
Citi analyst Michael Rollins indicated that market issues on wireless sector growth and price competitions have increased since the company released its Q2 2021 earnings, with stock price dropping 21% in the past three months. Rollins sees the company's Q2 results as a chance to "stabilize expectation and address these questions." The analyst likes T-Mobile's multiyear chance to grow its service revenue, considerably expand margins, and finally repurchase shares. Notably, Rollins is a T-Mobile shares buyer, which is his top pick in his coverage group, and he maintains a "Buy" rating on the stock with a price target of $167.
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