TMUS
T-Mobile US, Inc.
$192.43
Platform & Compounding FCF
75%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 3.1% below fair value
You pay
$192.43
Bear
$136.73
Fair
$198.49
Bull
$254.94
Bear
$136.73
-28.9%
4% stage 1 growth, 11% discount
Fair
$198.49
+3.2%
7% stage 1 growth, 11% discount
Bull
$254.94
+32.5%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
18.7x
Market is pricing in (growth)
8.1%
vs 7.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $242.55 from 54 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $198.49 per share.
Warnings
Wall Street's average price target is $242.55 (from 54 analysts). Our estimate is 28% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions