When it comes to telecommunication stocks, these are often viewed as reliable dividend payers as a result of their higher yields and strong cash flows. They are also often viewed as bond substitutes. Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm ...

Core Insights - The telecommunications industry in the United States is dominated by three major players: AT&T, Verizon, and T-Mobile, collectively known as the "Big Three" [1] AT&T - AT&T reported Q2 financials on July 23, beating sales estimates by over $400 million and surpassing adjusted EPS forecasts by 1 cent, resulting in a share price increase of over 1% [1][4] - The company added 401,000 net postpaid cell phone subscribers, a 4% decrease from the previous year but better than expected [2] - AT&T's broadband business added approximately 243,000 fiber optic customers and 203,000 AT&T Internet Air customers, with fiber revenues growing by nearly 19% [2] - The percentage of "converged customers" increased to just under 41%, indicating progress in cross-selling services [3] - AT&T anticipates $6.5 billion to $8 billion in cash tax savings through 2027 due to the One Big, Beautiful Bill (OBBB) [4] Verizon - Verizon posted Q2 results on July 21, beating expectations on revenue and adjusted EPS, and slightly raised its full-year guidance [6] - Shares closed up 4% following the results, but the company experienced a net loss of 9,000 postpaid cell phone customers, contrary to Wall Street expectations [7] - Verizon's broadband business added 293,000 net customers, down from 391,000 a year ago, indicating a solid quarter despite the postpaid losses [8] T-Mobile - T-Mobile reported Q2 results on July 23, slightly beating sales growth estimates and achieving a 14% increase in adjusted EPS to $2.84, surpassing the anticipated 8% rise [10] - The company added 830,000 net postpaid cell phone customers, marking a record for Q2, and achieved a total of 1.7 million net postpaid adds, another Q2 record [12] - T-Mobile's revenue per account (ARPA) increased by 5%, the highest growth rate in eight years, and it expects $1.5 billion in OBBB-related cash tax benefits in 2026 [13] - Overall, T-Mobile had the strongest performance among the three companies, leading to a price target increase from Morgan Stanley from $265 to $285, implying a 17% upside [15]

Core Viewpoint - T-Mobile US is positioned as a strong investment opportunity due to its subscription-based business model, which allows for accurate financial forecasting and reduced stock price volatility amidst market fluctuations [1][3]. Group 1: Company Performance - T-Mobile US has demonstrated significant growth, with a net addition of 454,000 5G broadband subscribers, enhancing its market share in wireless technology [7]. - The company reported a free cash flow of $4.6 billion, with an industry-leading margin of 26%, which supports reinvestment in expansion initiatives and shareholder benefits [8][9]. - Over the past 12 months, T-Mobile's stock has rallied by up to 41.3%, trading at 90% of its 52-week high levels, indicating strong market performance [9]. Group 2: Analyst Ratings and Forecasts - Analysts have responded positively to T-Mobile's earnings, with Morgan Stanley reiterating an Overweight rating and raising the price target to $285 per share [10]. - The 12-month stock price forecast for T-Mobile is $256.31, representing a potential upside of 5.24%, with a moderate buy rating based on 25 analyst ratings [11]. - The stock's current P/E ratio stands at 23.3x, significantly higher than the wireless industry average of 10.4x, reflecting investor confidence in T-Mobile's ability to outperform its peers [14]. Group 3: Investment Sentiment - Institutional investors, such as Mirae Asset Global Investments, have increased their stake in T-Mobile by 6.1%, indicating strong confidence in the company's growth potential [13]. - The market's willingness to assign a higher valuation to T-Mobile suggests that investors believe in its long-term performance and competitive advantage in the industry [14].

Core Insights - Starlink experienced a significant network outage, with over 60,000 reports logged on Downdetector, indicating a widespread issue [1] - The outage is being addressed by the company, which is owned and operated by SpaceX, led by Elon Musk [1] - Musk highlighted the rapid growth of Starlink's direct-to-cell-phone service, particularly after T-Mobile's announcement of its Starlink-powered satellite service [1] Company Overview - Starlink is a satellite internet service that aims to provide connectivity in areas lacking traditional carrier infrastructure [2] - T-Mobile's T-Satellite service is designed to keep phones connected in remote locations where conventional towers are unavailable [2]

Core Insights - T-Mobile's shares experienced a significant increase of nearly 8% following the release of strong second-quarter earnings results [1] Financial Performance - T-Mobile added 1.7 million postpaid net customers in Q2, driven by a doubling of sign-ups for the premium-priced Experience Beyond plan [3] - Sales rose by 6.9% year over year to $21.1 billion, surpassing the consensus analyst target of $21 billion [3] - Earnings per share increased from $2.49 to $2.84, exceeding the expected $2.68 [3] Network Expansion and Acquisitions - T-Mobile added 97,000 fiber-optic broadband customers from Lumos in Q2 [4] - The pending acquisition of UScellular is set to expand the company's network from 9,000 to 12,000 sites on August 1 [4] - The company is enhancing its fixed broadband offerings with Lumos fiber, T-Satellite service, and a broader range of home network options utilizing 4G and 5G technologies [4] Market Position - T-Mobile is actively taking steps to maintain its leadership in the American mobility market [5]

Group 1 - T-Mobile US Inc shares crossed above their 200-day moving average of $238.93, reaching a high of $251.75 per share, and are currently up about 5.8% on the day [1] - The 52-week low for T-Mobile US Inc shares is $173.74, while the 52-week high is $276.49, with the last trade recorded at $248.05 [4]

Core Insights - T-Mobile's Q2 2025 earnings report was released on July 23rd, leading to an update on the previous analysis which rated the company as a sell [1] Group 1: Company Analysis - The analysis highlights the importance of cash flow for both companies and investors, emphasizing that it is critical for investment decisions [1] - The analyst, Mike Dion, has extensive finance experience across various industries, which informs his investment approach focused on identifying value opportunities [1] Group 2: Market Context - The article does not provide specific market context or comparisons with competitors, focusing instead on T-Mobile's performance and the analyst's perspective [1]

Core Insights - T-Mobile, US, Inc. (TMUS) reported strong second-quarter 2025 results, with both revenue and net income exceeding estimates, driven by significant postpaid customer growth [1][10] Financial Performance - Net income for Q2 was $3.22 billion, or $2.84 per share, reflecting a 10.2% increase from $2.92 billion or $2.49 per share in the same quarter last year, surpassing the Zacks Consensus Estimate of $2.69 [2][10] - Total revenues reached $21.13 billion, up from $19.77 billion year-over-year, driven by robust service revenue growth, and exceeded the consensus estimate of $20.97 billion [3][10] Segment Results - Total service revenues were $17.43 billion, an increase from $16.42 billion in the previous year, with a 6.1% year-over-year growth primarily due to strong demand for postpaid services [4] - Postpaid services generated $14.07 billion in revenues, marking a 9.1% increase year-over-year [4] - Equipment revenues rose to $3.43 billion from $3.1 billion in the prior year, attributed to a higher average revenue per device sold [7] Customer Growth - T-Mobile added 1.7 million postpaid net customers and 318,000 postpaid net accounts during the quarter, with a postpaid phone churn rate of 0.9% [5] - Average revenue per postpaid account increased to $149.87 from $142.54 year-over-year [5] Cash Flow and Liquidity - Cash generated from operating activities was $6.99 billion, up from $5.52 billion in the prior year, with adjusted free cash flow of $4.6 billion, an increase from $4.4 billion [11] - As of June 30, 2025, T-Mobile had $10.25 billion in cash and cash equivalents, alongside $75.01 billion in long-term debt [11] Outlook - T-Mobile has raised its 2025 guidance, now expecting postpaid net customer additions between 6.1 million and 6.4 million, up from the previous estimate of 5.5-6 million [12] - Core adjusted EBITDA is projected to be between $33.3 billion and $33.7 billion, with anticipated cash from operating activities in the range of $27.1 billion to $27.5 billion [12]

Market Movements - As of July 24, U.S. stock index futures showed mixed results with Dow futures down 0.38%, S&P 500 futures up 0.13%, and Nasdaq futures up 0.33% [1] - European indices also showed positive movements, with Germany's DAX up 0.57%, UK's FTSE 100 up 0.97%, and the Euro Stoxx 50 up 0.42% [2][3] - WTI crude oil increased by 0.77% to $65.75 per barrel, while Brent crude oil rose by 0.61% to $68.93 per barrel [3][4] Company News - Smead Capital Management warned that current U.S. stock valuations have reached a "death line," similar to levels seen during the internet bubble, with top ten companies being more expensive than at the bubble's peak [4] - Google (GOOGL.US) reported Q2 revenue of $96.43 billion, exceeding analyst expectations, with cloud business sales up nearly 32% [8] - Tesla (TSLA.US) reported a 16% decline in Q2 revenue to $22.5 billion, missing analyst expectations, and warned of poor performance in upcoming quarters [9] - IBM (IBM.US) saw Q2 sales grow 8% to $17 billion, driven by its infrastructure business, but faced challenges in its software and consulting segments [10] - T-Mobile US (TMUS.US) exceeded user growth expectations in Q2, adding 830,000 contract customers, and raised its full-year guidance [11] - Nokia (NOK.US) reported a 29% drop in adjusted operating profit due to tariff impacts and a weak dollar, with revenue growth of only 2% [12] - Deutsche Bank (DB.US) turned a profit of €1.485 billion in Q2, significantly improving from a loss the previous year, driven by strong performance in fixed income and foreign exchange trading [13] - Vodafone (VOD.US) reported a 3.9% increase in Q1 revenue, with signs of stabilization in its German operations [14] - Total (TTE.US) experienced a 23% drop in Q2 profit due to falling oil and gas prices, while net debt increased by 29% [15] - Southwest Airlines (LUV.US) reported Q2 revenue of $7.24 billion, slightly below expectations, and cut its annual profit forecast by $1 billion due to economic uncertainties [16] Economic Data and Events - Upcoming economic data includes initial jobless claims and manufacturing PMI [17]

Group 1 - Major stock indices futures are up, with Dow futures rising by 0.50%, S&P 500 futures by 0.39%, and Nasdaq futures by 0.20% [1] - The Trump administration has announced an AI action plan, leading to a surge in chip stocks, with Broadcom up 2.6%, Nvidia up 1.5%, and AMD up 1.29% [1] - Tesla reported Q2 revenue of $22.5 billion, a 12% year-over-year decline, with earnings per share at $0.40, down 23% from the previous year, resulting in a stock drop of 6.56% [1] Group 2 - Google reported Q2 revenue of $96.4 billion and earnings per share of $2.31, exceeding analyst expectations, leading to a stock increase of 3.1% [2] - IBM's Q2 revenue was $73.9 billion, slightly below analyst expectations of $74.3 billion, resulting in a stock decline of 5.35% [3] - T-Mobile added 1.7 million postpaid customers in Q2, achieving its best quarterly performance, with stock rising by 5.20% [3] - Nokia's Q2 results fell short of expectations, with projected operating profit for the year revised down to between €1.6 billion and €2.1 billion [3] - ServiceNow reported Q2 profit of $385 million and revenue growth of approximately 23% to $3.22 billion, leading to a stock increase of 7.17% [4]