College students have a lot to keep track of between classes, social lives, and yes, even paying the monthly cell phone bill. Consumers looking to try and save on their phone plans have turned in droves to T-Mobile and its bevy of competitively priced plans, and this explosive growth in a traditionally slow moving industry has people on notice. T-Mobile has over 71.5 million subscribers and recently passed Sprint for the third largest network in the US. Under pressure from the most recent “Uncarrier” announcement of unlimited data for all T-Mobile plans, even Verizon had to respond with an unlimited option, which has been not been offered on the red network since 2011. Talks of a merger with Sprint, which were initially shut down by government regulators in 2013 due to anti-trust rules, became public and the stock price jumped 5.46% in daily trading. TMUS Clearly this company is doing something right with its brand, so lets dive into the details of this stock and its rise to fame.
Back in January 2015, the stock was trading around $25 a share and the course of the company was unsure. Coverage was poor compared to rivals, and people were still attracted to other networks by carrier subsidies on new devices. T-Mobile set out to change the industry and led the charge to pay full price for your device and offer cheaper options for monthly service. Band 12 700 MHz coverage rollouts over the next two years developed the network into a formidable asset that was just rated higher than Verizon in overall speed and quality by the research firm Open Signal. This dedication to the end user and improving the quality of the service was made clear when T-Mobile reported all 2016 Quarterly earnings beat the financial analyst estimates.
This measurable growth and the influx of new members joining the network has made investors see the value in this business, and their unique practices vs the competition. Having the lowest prices in the industry doesn’t mean that margins have to be cut as well, and this is exactly what Wall Street is looking for as investors pile on to the bandwagon. After the US election in November, TMUS has gone from $50 to over $63 dollars per share, and continues to climb on hopes of reduced regulation and relaxed tax structures for large corporations. While it is never fun to buy a stock just after it has reached its all time high, this company has room to grow with solid fundamentals, a stable base of consumers, and a disruptive mindset in a difficult industry. Shares have a target price of over $80 in the next 12 months and is rated as a BUY stock by the majority of brokers. Students looking to get in on an inexpensive stock with a history of incredible growth the past 2 years and some more gas in the tank should look no further than investing in T-Mobile.