TMUS Earnings Trade: The February 11 Catalyst Setup

The specific catalyst that will test T-Mobile's valuation is the company's Q4 2025 earnings release and Capital Markets Day update, scheduled for Wednesday, February 11, 2026. This event is not just another quarterly report; it is the sole near-term catalyst that can trigger a meaningful rally from the stock's current depressed levels. The market is waiting for two key deliverables: the results for the final quarter of the year and, more importantly, an update to the company's financial targets for 2026 and 2027.

Trading at $197.91, the stock is perilously close to its 52-week low of $194.01. This proximity highlights minimal downside risk but also underscores the market's deep skepticism. The stock has been in a steady decline, with a 120-day underperformance of -13.8% signaling that investors have little faith in the current narrative. The setup is clear: the February 11 results and guidance are the only events that can reset expectations and break this downtrend.

The Guidance Numbers: The 2025-2026 Profitability Benchmarks

The February 11 event will be judged on two concrete sets of numbers. The first is the execution against the company's own 2025 profit target. Management has guided for Core Adjusted EBITDA between $33.7 billion and $33.9 billion for the full fiscal year. This is the key profitability metric to watch for Q4 results. Beating or missing this range will signal whether the company's operational engine is on track or slipping.

The second, more immediate benchmark is the 2026 earnings forecast. The market is looking for the company to meet or exceed its own raised target of EPS of $11.22, which implies an 11.3% year-over-year growth from the 2025 consensus of $10.08. This is the high bar for the Capital Markets Day update. A clear path to that number is essential to justify the stock's depressed valuation.

For the quarter itself, the focus is on the bottom line. Analysts expect Q4 EPS of $2.14, a 16.7% decline from the year-ago quarter. Yet the company has a strong track record here, having topped Wall Street's bottom-line estimates in each of the last four quarters. The expectation is that this streak continues, but the real test will be whether the guidance for 2026 can be raised to support a rally.

The Trading Setup: Risk/Reward from Current Levels

The immediate risk/reward is defined by a stock that has been punished for its growth story. T-Mobile shares have underperformed the market by a wide margin, with a 120-day decline of -13.8%. This persistent selling pressure reflects deep skepticism that the company can translate its aggressive customer acquisition into the promised profitability. The stock's proximity to its 52-week low of $194.01 also means downside is limited, but so is the immediate catalyst for a rally.

The conditional re-rating potential hinges entirely on the February 11 event. A beat on Q4 EPS-following a streak of four consecutive bottom-line surprises-and, more critically, a raised 2026 guidance could trigger a short-term move. The market is looking for the company to meet its own raised target of EPS of $11.22, which implies an 11.3% year-over-year growth. Clear execution against the 2025 Core Adjusted EBITDA guide of $33.7 billion to $33.9 billion would provide the operational proof needed to support that forecast. However, that 11.3% growth bar remains high and will be the primary test of the new guidance.

The key risk is that growth slows or capital expenditure pressures margins, preventing the translation of customer wins into cash flow. While management expects Adjusted Free Cash Flow of $17.6 billion to $18.0 billion for 2025, that assumes a CapEx run rate of about $10.0 billion. Any deviation from this disciplined spending could undermine the promised profitability. For now, the setup is binary: the event either validates the growth story with concrete numbers, or it confirms the market's doubts.

Catalysts and Watchpoints: What Moves the Stock on February 11

The February 11 event will be judged on a few specific numbers and signals. The immediate watchpoint is the Q4 earnings report itself. The market expects a profit of $2.14 per share, a 16.7% decline from the year-ago quarter. Given that T-Mobile has topped Wall Street's bottom-line estimates in each of the last four quarters, a beat here would be a baseline requirement to maintain credibility. More importantly, investors will listen for any guidance on 2026 Core Adjusted EBITDA or Adjusted Free Cash Flow. The company's 2025 guidance for Core Adjusted EBITDA between $33.7 billion and $33.9 billion sets a high bar for operational profitability. Any update on the path to that number, or clarity on the projected Adjusted Free Cash Flow of $17.6 billion to $18.0 billion, will be scrutinized for signs of margin pressure or spending discipline.

The strategic watchpoint is the update to the company's financial targets for 2026 and 2027. Management has already raised its 2026 EPS target to $11.22, which implies an 11.3% year-over-year growth. The Capital Markets Day is the platform to either confirm this ambitious path or signal caution. Any change to those long-term targets will be a direct read on management's confidence in translating its aggressive customer acquisition-projected at 6.1 million to 6.4 million total postpaid net additions for 2025-into sustained cash flow.

The key risk to monitor is the capital expenditure (CapEx) story. The company expects to spend about $10.0 billion on network spending in 2025 while generating that massive free cash flow. If growth slows or if the promised profitability is undermined by higher-than-expected CapEx, the stock's re-rating potential will evaporate. The setup is binary: the event either provides the concrete numbers to validate the growth story, or it confirms the market's doubts about the translation of customer wins into cash.