T-Mobile has nearly reached the target price from our previous report after yet another stellar result surpassing Wall Street expectations. The company saw a staggering 75% growth in postpaid revenues with as many as 1.2 million postpaid customer additions during the quarter and its ARPU (average revenue per user) going up 3.3% to $47.3. T-Mobile has consistently maintained its low pricing and its consumer-friendly policies for the past few years and is clearly leading the 5G deployment race over rivals, Verizon and AT&T. The company has a two-year lead in the 5G mid-band deployment and is well-positioned to be a market leader in the new 5G era. The management also claims to have made meaningful progress in the post-merger integration of Sprint and the realization of synergies. We give the stock a ‘Hold’ rating and a revised target price after its recent runup. Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology. In this report, we have carried out a fundamental analysis of the historical financial statements of the company. We have also added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price.
