Is T-Mobile US Inc (TMUS) overvalued?
On Equity Rank's model estimate, TMUS trades close to its fair value (4% above it). T-Mobile US Inc (TMUS) last closed at $162.01; the multi-method model fair value is $155.21.
| Price | Model fair value | Price vs model |
|---|---|---|
| $162.01 | $155.21 | 4% above |
What the answer rests on
- 5 of 12 valuation methods put TMUS's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, TMUS's free cash flow would need to grow about -9.6% a year for ten years (a reverse discounted cash flow).
- TMUS trades at 15.3 times its last year's earnings, against a median of 11.8 for 21 profitable Communication Services companies.
- Over the past year the price sat below the model fair value on 16% of trading days. The gap ranged from 23% below to 34% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind TMUS's fair value · What prices assume · Other companies