T-Mobile US (TMUS) Stock Forecast & Price Target

T-Mobile US reported strong financial performance for 2Q25, with core EBITDA surpassing consensus estimates by 2% and experiencing a 6.4% year-over-year increase, reaching $8.3 billion. The company demonstrated robust subscriber growth, particularly in high-value top-tier plans, contributing to an increase in average revenue per user (ARPU) and reflecting customer preference amid recent enhancements like the T-Satellite launch. Additionally, T-Mobile raised its guidance for EBITDA, operating cash flow (OCF), and free cash flow (FCF) by $100 million at the lower end, signaling continued strength in postpaid phone net additions and overall operational performance.

The analysis indicates potential risks to T-Mobile US's financial outlook, primarily stemming from factors that could lead to shortfalls in revenue and cash flow generation, affected by economic, competitive, or operational dynamics. A downside scenario posits a valuation based on a ~5x EBITDA multiple, consistent with the 10-year trough multiple, driven by issues such as customer churn, subdued gross adds, and lower average revenue per user (ARPU). These concerns highlight the vulnerability of T-Mobile's financial performance and raise apprehensions regarding its future profitability and market positioning.