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NEW YORK (TheStreet) -- Shares of T-Mobile US Inc.  (TMUS) - Get T-Mobile US, Inc. Report are up 2.95% to $28.94,  on very heavy trading volume, after it was reported that France's Iliad plans to bid for a bigger stake in Deutsche Telekom's (DTEGY) U.S. unit than it sought in July, as the telecom carrier approaches a self-imposed deadline to reach a deal, sources told Bloomberg.

Iliad had proposed buying 56.6% of T-Mobile US, and still intends to offer about $33 for each T-Mobile share for a significantly larger stake, sources added. Controlled by billionaire entrepreneur Xavier Niel, Iliad has set a deadline of this month for reaching a preliminary agreement with Deutsche Telekom, according to sources..

Executives at Deutsche Telekom, which owns slighly more than 66% of T-Mobile,  view at least $35 per share as a fairer price for T-Mobile, sources told Bloomberg.

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TheStreet Recommends

TheStreet Ratings team rates T-MOBILE US INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate T-MOBILE US INC (TMUS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500.
  • T-MOBILE US INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($0.44 versus -$0.10).
  • 48.95% is the gross profit margin for T-MOBILE US INC which we consider to be strong. 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 5.44% significantly trails the industry average.
  • Compared to other companies in the Wireless Telecommunication Services industry and the overall market on the basis of return on equity, T-MOBILE US INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
  • Despite the current debt-to-equity ratio of 1.58, it is still below the industry average, suggesting that this level of debt is acceptable within the Wireless Telecommunication Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.01 is sturdy.
  • You can view the full analysis from the report here: TMUS Ratings Report

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