T-Mobile gave strong guidance on Wednesday after an easy earnings beat for the fourth quarter. T-Mobile stock jumped near a buy point.
Intraday, the T-Mobile earnings report sent the S&P 500 stock to the top of that index. "2024 was the biggest growth year ever in our history," T-Mobile CEO Mike Sievert told CNBC in an interview after the report. "And that is just because 2025 hasn't happened yet."
But analysts at Moffett Nathanson flagged valuation concerns after the Q4 report.
T-Mobile outpaced Verizon and AT&T in core subscriber growth. In Q4, the wireless company added nearly twice as many subscribers as its rivals. Those rivals delivered largely in-line results and tepid guidance last week.
T-Mobile Earnings Surge 54%, Above Views
For the final quarter of 2024, T-Mobile delivered earnings of $2.57 a share, beating analyst estimates for $2.29 a share, according to FactSet. Revenue rose 6.8% to $21.87 billion, also above views for $21.33 billion. Year over year, T-Mobile earnings surged 54% and sales rose 7%. Both earnings and sales accelerated for a third straight quarter.
For the full year, T-Mobile earnings per share jumped 39%.
In Q4, the company added 903,000 postpaid phone subscribers, well above views for 858,500. That closely watched number represents the most profitable wireless connections on a monthly contract.
The result outpaced postpaid connection gains at Verizon and AT&T over the same period.
In 2025, T-Mobile expects to add 5.5 million to 6 million postpaid connections, the highest guidance the company said it has ever given at the start of a year. That would be roughly double the 3.1 million new postpaid connections in 2024.
Analysts now project 2025 earnings of $10.60 per share, a 10% increase, FactSet shows.
T-Mobile Stock Jumps Near Buy Point
Shares gapped up 6.3% to 235.15 in Wednesday's stock market action. T-Mobile stock jumped above the 50-day moving average in heavy volume. The move put TMUS stock within 5% of a 248.15 buy point in a nine-week consolidation near record highs, according to MarketSurge charts.
Ahead of earnings, T-Mobile stock was unmoved on Tuesday by news that Apple was adding Starlink support to T-Mobile phones in a beta test. Starlink comes via Elon Musk's SpaceX.
On Wednesday, analyst Craig Moffett of Moffett Nathanson questioned whether the premium for T-Mobile stock is warranted, though the company is "still running circles" around Verizon and AT&T.
In 2025, "we expect pressure on net adds from tighter immigration policies," Moffett said. "That will make competitive intensity worse. Already none of the Big Three are seeing much benefit from price hikes because promotion costs keep spiraling higher."
On Wednesday, AT&T stock fell from an earnings breakout but is still in the buy range. Verizon continued to slide below the 50-day line.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
