Will T-Mobile (TMUS) Stock See Gains From Unlimited Video Streaming?
NEW YORK (TheStreet) -- T-Mobile US (TMUS) - Get Report announced it will allow customers to stream videos from various services without deducting from the user's monthly data through its Binge On service.
T-Mobile customers with subscriptions to HBO (TWX), Hulu, Netflix (NFLX), Showtime (CBS), Starz (STRZA), WatchESPN (DIS) and an additional 18 services will be able to stream videos without using data from their Simple Choice plan on November 15.
"Un-carrier X marks the next step in this revolution, and it is massive," CEO John Legere said in a statement. "With Binge On, no one pays—not the customers, not the video streaming services—and everyone wins."
The new technology in T-Mobile's network optimizes video for smaller mobile screens, minimizing data usage.
T-Mobile has been boosting its mobile features since last year, adding services like free music streaming and cheaper international roaming, which have contributed to the addition of more than 1 million subscribers a month in the past five quarters, Bloomberg reports.
T-Mobile stock closed lower by 3.97% to $37.03 on heavy trading volume on Tuesday.
By the end of the trading day, 7.34 million shares of T-Mobile had exchanged hands, compared with its average daily volume of 3.66 million shares.
Separately, TheStreet Ratings team rates T-MOBILE US INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate T-MOBILE US INC (TMUS) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- T-MOBILE US INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, T-MOBILE US INC turned its bottom line around by earning $0.29 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.29).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Wireless Telecommunication Services industry. The net income increased by 246.8% when compared to the same quarter one year prior, rising from -$94.00 million to $138.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.3%. Since the same quarter one year prior, revenues slightly increased by 6.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Net operating cash flow has increased to $1,531.00 million or 44.16% when compared to the same quarter last year. In addition, T-MOBILE US INC has also vastly surpassed the industry average cash flow growth rate of -52.55%.
- The gross profit margin for T-MOBILE US INC is rather high; currently it is at 57.15%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TMUS's net profit margin of 1.75% significantly trails the industry average.
- You can view the full analysis from the report here: TMUS
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.