T-Mobile Shares Drop and Rebound After Earnings Report
On July 23, T-Mobile reported second-quarter earnings that beat profit expectations but missed revenue forecasts. The stock fell nearly 11% in response to concerns over a slower third-quarter outlook for postpaid account additions due to rate plan changes. However, shares rebounded by about 6% the next day as investors reassessed management's guidance and financial performance. The company added 277,000 postpaid accounts during Q2 with service revenue up 9%. Management expects a temporary slowdown in customer growth for Q3 due to migration efforts but maintained its full-year target of adding between 950,000 and 1.05 million new customers. Free cash flow guidance was raised slightly amid lower tax expectations. Despite the volatility, T-Mobile's underlying financials remained strong with a forward P/E ratio near 14 and an expected free cash flow yield approaching 10%. The stock is currently trading about 31% below its 52-week high.
Tickers: $TMUS
Topics: customer churn rate plan changes revenue growth stock volatility T-Mobile