Why Is T-Mobile (TMUS) Down 0.1% Since Last Earnings Report?

A month has gone by since the last earnings report for T-Mobile (TMUS). Shares have lost about 0.1% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is T-Mobile due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

TMUS Q4 Earnings Beat Estimates on Solid Demand for Postpaid Services

T-Mobile reported impressive fourth-quarter 2025 results, with both top and bottom lines beating the respective Zacks Consensus Estimate. This Bellevue, WA-based wireless service provider reported a top-line expansion backed by industry-leading postpaid customer growth. T-Mobile follows a multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600 MHz, 1.9 GHz and 2.5 GHz bands.

TMUS’ Net Income

Net income in the fourth quarter was $2.1 billion or $1.88 per share, down from $2.98 billion or $2.57 in the year-ago quarter. The 29.5% year-over-year decline was due to higher operating expenses and interest expenses. Adjusted EPS was $2.14 per share, which beat the Zacks Consensus Estimate of $2.03.

For 2025, the company reported a net income of $10.99 billion or $9.72 per share, down from $11.33 billion or $9.66 per share in 2024.

TMUS’ Revenues

Net sales were $24.33 billion, up from $21.87 billion in the year-ago quarter, driven by solid growth in service revenues. The top line beat the consensus estimate of $23.63 billion.

For 2025, the company reported a revenue of $88.3 billion, up from $81.4 billion in 2024.

TMUS’ Segment Results in Q4

Total Service revenues were $18.7 billion, up from $16.9 billion in the year-ago quarter. The 10.5% year-over-year growth was primarily driven by solid demand for postpaid services. Net sales from Postpaid Services contributed $15.37 billion in revenues, up 13.9% year over year.

During the quarter, T-Mobile added 2.4 million postpaid net customers and 261,000 postpaid net accounts. Postpaid phone net customer additions were 962,000. The postpaid phone churn rate was 1.02%. 5G broadband net customer additions were 495,000. Postpaid average revenues per account rose to $150.17 from $146.28 in the year-ago quarter.

Net sales from Prepaid services were $2.58 billion, down from $2.68 billion in the year-earlier quarter. Prepaid net customer addition was 57,000, with a churn rate of 2.76%. Wholesale and other service revenues were $738 million, matching the figure of the prior-year quarter.

Equipment revenues were $5.36 billion, up from $4.69 billion in the year-ago quarter. This improvement was primarily attributed to a higher average revenue per device sold, owing to an increase in the high-end phone mix.

Other revenues were $268 million, up from the prior-year quarter’s of $245 million.

Other Details for TMUS

Total operating expenses increased to $20.59 billion from $17.28 billion in the year-ago quarter. Operating income declined to $3.73 billion from $4.58 billion. T-Mobile recorded core adjusted EBITDA of $8.4 billion, up 7% year over year, backed by solid growth in service revenues.

TMUS’ Cash Flow & Liquidity

In the December quarter, T-Mobile generated $6.65 billion of cash from operating activities compared with $5.54 billion in the prior-year quarter. Adjusted free cash flow was $4.18 billion, up from $4.08 billion in the year-earlier quarter.

As of Dec 31, 2025, the company had $5.59 billion in cash and cash equivalents, with $79.64 billion of long-term debt compared to respective tallies of $5.4 billion and $72.7 billion in 2024. During the quarter, it repurchased 11.9 million shares for $2.5 billion.

TMUS’ Outlook

The company now expects postpaid net customer additions to be between 900,000 and 1 million. Core adjusted EBITDA is estimated to be $37-$37.5. It anticipates cash from operating activities in the range of $28-$28.7 billion. TMUS expects adjusted free cash flow in the band of $18-$18.7 billion. Capital expenditure is anticipated to be around $10 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -8.33% due to these changes.

VGM Scores

Currently, T-Mobile has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, T-Mobile has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

T-Mobile is part of the Zacks Wireless National industry. Over the past month, Verizon Communications (VZ), a stock from the same industry, has gained 2.4%. The company reported its results for the quarter ended December 2025 more than a month ago.

Verizon reported revenues of $36.38 billion in the last reported quarter, representing a year-over-year change of +2%. EPS of $1.09 for the same period compares with $1.10 a year ago.

For the current quarter, Verizon is expected to post earnings of $1.23 per share, indicating a change of +3.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Verizon has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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This article originally published on Zacks Investment Research (zacks.com).

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