T-Mobile US, Inc. (TMUS) Stock Valuation — PE Analysis
Telecommunications Services · NASDAQ
Current Price
$181.52
PE Ratio (TTM)
18.9x
Intrinsic Value
$181.66
+0.1% margin of safety
COMPETITIVE MOAT
↑Unmatched 5G Network Footprint
T-Mobile's extensive 5G network, built through aggressive spectrum acquisition and deployment, offers superior speed and coverage. This creates a significant advantage over competitors still building out their networks.
↑Aggressive 'Un-carrier' Brand Loyalty
The company's history of disruptive pricing and customer-centric initiatives has fostered strong brand loyalty. This makes it harder for customers to switch to competitors offering less value.
↑Scale and Efficiency Gains
As the second-largest U.S. wireless carrier, T-Mobile benefits from economies of scale in network operations and procurement. This allows for cost efficiencies that can be passed on to consumers.
INVESTMENT RISKS
↓Regulatory Scrutiny and Policy Changes
The telecommunications sector is subject to significant government regulation. Changes in policy regarding net neutrality, spectrum allocation, or mergers could negatively impact T-Mobile's operations and profitability.
↓Technological Obsolescence and Investment Needs
Rapid advancements in wireless technology require continuous, substantial investment. Failure to keep pace with new technologies like future generations of mobile networks could lead to a competitive disadvantage.
↓Execution Risk on Future Growth Strategies
T-Mobile's future growth relies on successfully executing new initiatives, such as expanding into new service areas or integrating acquisitions. Any missteps in these complex endeavors could hinder performance.
Base case
TMUS base case PE valuation
At a current price of $181.52, the base case PE valuation puts TMUS fair value near $181.66 per share. That figure assumes 4.0% yearly earnings growth, a target PE multiple of 19x, and a 10% discount rate.
Intrinsic Value
$181.66
Margin of safety
+0.1%
Expected annual return
+0.0%
Base case assumptions: 4.0% annual earnings growth, 19x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the TMUS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for T-Mobile US, Inc. respond.
Open PE Calculator for TMUSCompany Overview
T-Mobile US, Inc., alongside its subsidiaries, offers mobile telecommunications services across the United States, Puerto Rico, and the U.S. Virgin Islands. Catering to approximately 108.7 million subscribers, the company delivers essential voice, messaging, and data connectivity to customers in postpaid, prepaid, and wholesale segments. Beyond services, T-Mobile also supplies a broad array of wireless devices, such as smartphones, wearables, tablets, and other mobile communication gadgets, along with associated accessories. These offerings are marketed under both the T-Mobile and Metro by T-Mobile brands. Direct distribution occurs through its proprietary retail stores, the T-Mobile mobile application, customer service channels, and its official online platforms. Additionally, the company provides devices to independent dealers and other distributors for resale via external retail locations and various third-party websites. As of December 31, 2021, its robust network infrastructure encompassed approximately 102,000 macro cell sites and 41,000 small cell/distributed antenna system locations. T-Mobile US, Inc. was established in 1994 and maintains its headquarters in Bellevue, Washington.
Financial Metrics — TMUS PE Stock Valuation Data
PE Ratio (TTM)
18.9x
PEG Ratio
n/m
Earnings Yield
5.38%
ROE (TTM)
18.2%
Revenue/Share (TTM)
$85.22
Dividend Yield
2.17%
Debt/Equity
2.06x
Frequently Asked Questions
What is the PE ratio of TMUS?
The trailing twelve-month PE ratio of TMUS reflects how much investors pay per dollar of T-Mobile US, Inc.'s earnings. This metric is most useful when compared to Telecommunications Services peers and the company's own historical range.
Is TMUS overvalued based on PE ratio?
TMUS's PE of 18.9x combined with a PEG ratio of -1.92 provides a growth-adjusted perspective. TMUS has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Telecommunications Services, a DCF analysis may be more appropriate.
How do I value TMUS stock using PE ratio?
To value T-Mobile US, Inc. using PE: (1) Compare the current PE (18.9x) against the Telecommunications Services median to assess relative pricing, (2) check the PEG ratio (-1.92) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of TMUS?
TMUS's PEG ratio is -1.92, calculated by dividing the PE ratio (18.9x) by the expected earnings growth rate. Because TMUS has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for TMUS stock valuation?
PE ratio gives a quick relative read — how TMUS is priced versus Telecommunications Services peers. DCF provides an absolute value based on projected free cash flows. For TMUS, with a strong ROE of 18.2%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See TMUS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Communication Services valuationsP/E and DCF value TMUS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.