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T-Mobile US, Inc. (TMUS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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T-Mobile US, Inc. (TMUS)

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Intrinsic Value (DCF)

Current$189.67
→
Intrinsic$168.12
-11%
$81.84$168.12$339.67
Market implies 21% growth for 5 years
TMUS appears fairly valued — current price aligns with our DCF estimate.
At $190, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $82 → Bull $340. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →15%17%19%21%
8%$234$262$292$323
10%$130$149$168$189
12%$75$89$103$118
14%$41$52$63$75

Bull Case

  • Bull case ($340) offers 79% upside at 23% growth, 8% discount

Bear Case

  • Bear case ($82) implies 57% downside at 15% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$11.90B
Year 2$14.17B
Year 3$16.89B
Year 4$20.13B
Year 5$23.99B
Terminal$380.10B

📐 Model Inputs

Growth Rate19.2%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$9.98BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Regulated returns may affect assumptions. See FAQ below for full methodology.

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Frequently Asked Questions

Is TMUS stock undervalued or overvalued?
🔴 OVERVALUED

TMUS trades at $189.67 vs. our DCF-derived intrinsic value of $128.75, implying -35% downside. Using a 9.5% WACC and 19.2% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($235.92) suggests limited upside.

What is TMUS's intrinsic value?

Using a 5-year DCF model: Base FCF of $9.98B, projected at 19.2% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $109.00B net debt and dividing by 1.17B shares: Bear $55.65 | Base $128.75 | Bull $235.92. Current price $189.67 implies -35% to base case.

How is TMUS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 19.2% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($260.05B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.