T-Mobile US NASDAQ:TMUS’ five-year decline in earnings isn’t encouraging, but shareholders are still up 119% over that time
The maximum you can lose on any stock (assuming you are not using leverage) is 100% of your money. But when you choose a business that is truly thriving, you can Craft more than 100%. For example, the price of T-Mobile US, Inc. (NASDAQ:TMUS) the stock has grown 119% over the past five years. Again, the 8.4% drop in share price was not so fun for shareholders.
Given that long-term performance has been good but there has been a recent pullback of 5.9%, let’s see if the fundamentals match the stock price.
Check out our latest analysis for T-Mobile US
While markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying trading performance. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
T-Mobile US’s earnings per share are down 11% a year, despite a strong five-year share price performance.
This means that the market is unlikely to judge the company based on earnings growth. Since earnings per share doesn’t seem to correlate with share price, we’ll look at other metrics instead.
On the other hand, T-Mobile US revenue is growing well, at a compound rate of 18% over the past five years. In this case, the company can sacrifice current earnings per share to drive growth.
The graph below illustrates the evolution of income and income over time (reveal the exact values by clicking on the image).
T-Mobile US is a well-known stock, with extensive analyst coverage, suggesting some visibility on future growth. If you are thinking of buying or selling T-Mobile US stock, you should check out this free report showing analyst consensus estimates for future earnings.
A different perspective
It’s good to see that T-Mobile US has rewarded its shareholders with a total shareholder return of 14% over the past twelve months. That said, the five-year TSR of 17% per year is even better. While it’s worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 4 warning signs for T-Mobile US which you should be aware of before investing here.
If you like buying stocks alongside management then you might love this free list of companies. (Hint: insiders bought them).
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on US exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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