NEW YORK (TheStreet) -- Shares of T-Mobile US Inc. (TMUS) closed down -1.59% to $29.14 after company CFO Braxton Carter called a $15 billion takeover offer from French wireless company Iliad "inadequate," but hinted it may be open to a higher offer, the Wall Street Journal reports.
At an investor conference, Carter said that Iliad's offer last month to buy 57% of the company was "very flattering" but "a very inadequate value proposition."
But, he added, "I think rarely people come with their best bid to start."
Iliad has said that it didn't see a need to boost the bid after T-Mobile's longtime suitor, Sprint (S), yielded to regulatory pressure in abandoning its pursuit, the Journal noted.
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 solid stock price performance, robust revenue growth and impressive record of earnings per share growth. 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:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key.
- The revenue growth came in higher than the industry average of 3.7%. Since the same quarter one year prior, revenues rose by 15.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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, T-MOBILE US INC's return on equity significantly trails that of both the industry average and 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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