Intrinsic value of T-Mobile US - TMUS

Previous Close

$65.98

  Intrinsic Value

$112.68

stock screener

  Rating & Target

str. buy

+71%

Previous close

$65.98

 
Intrinsic value

$112.68

 
Up/down potential

+71%

 
Rating

str. buy

We calculate the intrinsic value of TMUS stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 54.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
Revenue, $m
  43,974
  47,479
  51,122
  54,908
  58,842
  62,931
  67,181
  71,600
  76,198
  80,982
  85,962
  91,151
  96,558
  102,196
  108,077
  114,215
  120,624
  127,319
  134,316
  141,631
  149,280
  157,283
  165,659
  174,426
  183,607
  193,222
  203,295
  213,850
  224,912
  236,507
Variable operating expenses, $m
  23,349
  24,913
  26,538
  28,228
  29,983
  31,808
  33,704
  35,676
  37,728
  39,862
  38,358
  40,673
  43,086
  45,602
  48,226
  50,965
  53,825
  56,813
  59,935
  63,199
  66,612
  70,183
  73,920
  77,833
  81,929
  86,220
  90,714
  95,424
  100,360
  105,534
Fixed operating expenses, $m
  14,734
  15,058
  15,390
  15,728
  16,074
  16,428
  16,789
  17,159
  17,536
  17,922
  18,316
  18,719
  19,131
  19,552
  19,982
  20,422
  20,871
  21,330
  21,799
  22,279
  22,769
  23,270
  23,782
  24,305
  24,840
  25,386
  25,945
  26,516
  27,099
  27,695
Total operating expenses, $m
  38,083
  39,971
  41,928
  43,956
  46,057
  48,236
  50,493
  52,835
  55,264
  57,784
  56,674
  59,392
  62,217
  65,154
  68,208
  71,387
  74,696
  78,143
  81,734
  85,478
  89,381
  93,453
  97,702
  102,138
  106,769
  111,606
  116,659
  121,940
  127,459
  133,229
Operating income, $m
  5,891
  7,508
  9,194
  10,952
  12,785
  14,695
  16,688
  18,766
  20,934
  23,197
  29,288
  31,758
  34,341
  37,042
  39,869
  42,828
  45,928
  49,177
  52,582
  56,153
  59,899
  63,830
  67,956
  72,289
  76,838
  81,616
  86,636
  91,910
  97,453
  103,278
EBITDA, $m
  15,545
  17,635
  19,812
  22,080
  24,443
  26,905
  29,470
  32,144
  34,932
  37,840
  40,876
  44,045
  47,357
  50,818
  54,438
  58,225
  62,189
  66,340
  70,688
  75,245
  80,022
  85,032
  90,287
  95,801
  101,588
  107,662
  114,040
  120,737
  127,771
  135,159
Interest expense (income), $m
  0
  1,699
  1,939
  2,188
  2,446
  2,715
  2,994
  3,284
  3,586
  3,899
  4,226
  4,565
  4,918
  5,287
  5,670
  6,070
  6,488
  6,923
  7,378
  7,853
  8,349
  8,869
  9,411
  9,979
  10,573
  11,196
  11,847
  12,529
  13,244
  13,993
  14,778
Earnings before tax, $m
  4,192
  5,569
  7,006
  8,506
  10,070
  11,701
  13,403
  15,180
  17,034
  18,972
  24,723
  26,840
  29,054
  31,372
  33,798
  36,341
  39,005
  41,799
  44,729
  47,804
  51,031
  54,419
  57,977
  61,715
  65,642
  69,769
  74,107
  78,666
  83,460
  88,500
Tax expense, $m
  1,132
  1,504
  1,892
  2,297
  2,719
  3,159
  3,619
  4,099
  4,599
  5,122
  6,675
  7,247
  7,845
  8,470
  9,126
  9,812
  10,531
  11,286
  12,077
  12,907
  13,778
  14,693
  15,654
  16,663
  17,723
  18,838
  20,009
  21,240
  22,534
  23,895
Net income, $m
  3,060
  4,065
  5,115
  6,209
  7,351
  8,542
  9,784
  11,081
  12,435
  13,849
  18,048
  19,593
  21,210
  22,901
  24,673
  26,529
  28,474
  30,513
  32,652
  34,897
  37,253
  39,726
  42,323
  45,052
  47,919
  50,931
  54,098
  57,426
  60,926
  64,605

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  76,477
  82,572
  88,908
  95,492
  102,334
  109,445
  116,836
  124,522
  132,517
  140,838
  149,500
  158,523
  167,927
  177,732
  187,960
  198,635
  209,782
  221,425
  233,593
  246,314
  259,618
  273,536
  288,102
  303,350
  319,316
  336,038
  353,556
  371,913
  391,151
  411,316
Adjusted assets (=assets-cash), $m
  76,477
  82,572
  88,908
  95,492
  102,334
  109,445
  116,836
  124,522
  132,517
  140,838
  149,500
  158,523
  167,927
  177,732
  187,960
  198,635
  209,782
  221,425
  233,593
  246,314
  259,618
  273,536
  288,102
  303,350
  319,316
  336,038
  353,556
  371,913
  391,151
  411,316
Revenue / Adjusted assets
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
  0.575
Average production assets, $m
  59,277
  64,002
  68,912
  74,016
  79,319
  84,831
  90,560
  96,517
  102,714
  109,163
  115,877
  122,871
  130,160
  137,760
  145,688
  153,962
  162,602
  171,627
  181,058
  190,918
  201,230
  212,018
  223,308
  235,126
  247,502
  260,463
  274,042
  288,270
  303,181
  318,811
Working capital, $m
  -7,739
  -8,356
  -8,997
  -9,664
  -10,356
  -11,076
  -11,824
  -12,602
  -13,411
  -14,253
  -15,129
  -16,043
  -16,994
  -17,986
  -19,022
  -20,102
  -21,230
  -22,408
  -23,640
  -24,927
  -26,273
  -27,682
  -29,156
  -30,699
  -32,315
  -34,007
  -35,780
  -37,638
  -39,584
  -41,625
Total debt, $m
  32,319
  36,464
  40,772
  45,250
  49,902
  54,738
  59,764
  64,990
  70,427
  76,085
  81,975
  88,111
  94,505
  101,173
  108,128
  115,387
  122,966
  130,884
  139,158
  147,809
  156,855
  166,320
  176,224
  186,593
  197,450
  208,821
  220,733
  233,216
  246,297
  260,010
Total liabilities, $m
  52,004
  56,149
  60,457
  64,935
  69,587
  74,423
  79,449
  84,675
  90,112
  95,770
  101,660
  107,796
  114,190
  120,858
  127,813
  135,072
  142,651
  150,569
  158,843
  167,494
  176,540
  186,005
  195,909
  206,278
  217,135
  228,506
  240,418
  252,901
  265,982
  279,695
Total equity, $m
  24,473
  26,423
  28,450
  30,557
  32,747
  35,022
  37,388
  39,847
  42,406
  45,068
  47,840
  50,727
  53,737
  56,874
  60,147
  63,563
  67,130
  70,856
  74,750
  78,821
  83,078
  87,532
  92,193
  97,072
  102,181
  107,532
  113,138
  119,012
  125,168
  131,621
Total liabilities and equity, $m
  76,477
  82,572
  88,907
  95,492
  102,334
  109,445
  116,837
  124,522
  132,518
  140,838
  149,500
  158,523
  167,927
  177,732
  187,960
  198,635
  209,781
  221,425
  233,593
  246,315
  259,618
  273,537
  288,102
  303,350
  319,316
  336,038
  353,556
  371,913
  391,150
  411,316
Debt-to-equity ratio
  1.320
  1.380
  1.430
  1.480
  1.520
  1.560
  1.600
  1.630
  1.660
  1.690
  1.710
  1.740
  1.760
  1.780
  1.800
  1.820
  1.830
  1.850
  1.860
  1.880
  1.890
  1.900
  1.910
  1.920
  1.930
  1.940
  1.950
  1.960
  1.970
  1.980
Adjusted equity ratio
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,060
  4,065
  5,115
  6,209
  7,351
  8,542
  9,784
  11,081
  12,435
  13,849
  18,048
  19,593
  21,210
  22,901
  24,673
  26,529
  28,474
  30,513
  32,652
  34,897
  37,253
  39,726
  42,323
  45,052
  47,919
  50,931
  54,098
  57,426
  60,926
  64,605
Depreciation, amort., depletion, $m
  9,654
  10,127
  10,618
  11,128
  11,659
  12,210
  12,783
  13,378
  13,998
  14,643
  11,588
  12,287
  13,016
  13,776
  14,569
  15,396
  16,260
  17,163
  18,106
  19,092
  20,123
  21,202
  22,331
  23,513
  24,750
  26,046
  27,404
  28,827
  30,318
  31,881
Funds from operations, $m
  12,715
  14,192
  15,732
  17,337
  19,009
  20,752
  22,567
  24,460
  26,433
  28,492
  29,636
  31,880
  34,226
  36,677
  39,242
  41,925
  44,734
  47,676
  50,758
  53,989
  57,376
  60,928
  64,654
  68,565
  72,669
  76,978
  81,502
  86,253
  91,244
  96,486
Change in working capital, $m
  -593
  -617
  -641
  -666
  -692
  -720
  -748
  -778
  -809
  -842
  -877
  -913
  -952
  -992
  -1,035
  -1,080
  -1,128
  -1,178
  -1,231
  -1,287
  -1,346
  -1,409
  -1,474
  -1,543
  -1,616
  -1,692
  -1,773
  -1,858
  -1,947
  -2,041
Cash from operations, $m
  13,308
  14,809
  16,374
  18,004
  19,702
  21,471
  23,315
  25,237
  27,242
  29,334
  30,512
  32,793
  35,177
  37,670
  40,277
  43,005
  45,862
  48,854
  51,989
  55,276
  58,722
  62,336
  66,128
  70,108
  74,285
  78,670
  83,275
  88,111
  93,190
  98,527
Maintenance CAPEX, $m
  -5,474
  -5,928
  -6,400
  -6,891
  -7,402
  -7,932
  -8,483
  -9,056
  -9,652
  -10,271
  -10,916
  -11,588
  -12,287
  -13,016
  -13,776
  -14,569
  -15,396
  -16,260
  -17,163
  -18,106
  -19,092
  -20,123
  -21,202
  -22,331
  -23,513
  -24,750
  -26,046
  -27,404
  -28,827
  -30,318
New CAPEX, $m
  -4,538
  -4,724
  -4,911
  -5,103
  -5,303
  -5,512
  -5,729
  -5,957
  -6,197
  -6,449
  -6,714
  -6,994
  -7,289
  -7,600
  -7,928
  -8,274
  -8,640
  -9,025
  -9,431
  -9,860
  -10,312
  -10,788
  -11,290
  -11,819
  -12,375
  -12,961
  -13,579
  -14,228
  -14,911
  -15,630
Cash from investing activities, $m
  -10,012
  -10,652
  -11,311
  -11,994
  -12,705
  -13,444
  -14,212
  -15,013
  -15,849
  -16,720
  -17,630
  -18,582
  -19,576
  -20,616
  -21,704
  -22,843
  -24,036
  -25,285
  -26,594
  -27,966
  -29,404
  -30,911
  -32,492
  -34,150
  -35,888
  -37,711
  -39,625
  -41,632
  -43,738
  -45,948
Free cash flow, $m
  3,296
  4,157
  5,063
  6,009
  6,997
  8,028
  9,103
  10,224
  11,394
  12,614
  12,882
  14,212
  15,601
  17,054
  18,573
  20,162
  21,826
  23,569
  25,395
  27,310
  29,318
  31,425
  33,637
  35,958
  38,397
  40,958
  43,650
  46,479
  49,452
  52,578
Issuance/(repayment) of debt, $m
  4,000
  4,145
  4,308
  4,477
  4,653
  4,835
  5,026
  5,226
  5,437
  5,658
  5,890
  6,136
  6,394
  6,667
  6,955
  7,259
  7,580
  7,918
  8,274
  8,650
  9,047
  9,464
  9,905
  10,368
  10,857
  11,371
  11,913
  12,482
  13,082
  13,713
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,000
  4,145
  4,308
  4,477
  4,653
  4,835
  5,026
  5,226
  5,437
  5,658
  5,890
  6,136
  6,394
  6,667
  6,955
  7,259
  7,580
  7,918
  8,274
  8,650
  9,047
  9,464
  9,905
  10,368
  10,857
  11,371
  11,913
  12,482
  13,082
  13,713
Total cash flow (excl. dividends), $m
  7,296
  8,301
  9,371
  10,486
  11,650
  12,863
  14,129
  15,450
  16,830
  18,272
  18,772
  20,347
  21,996
  23,721
  25,528
  27,421
  29,406
  31,487
  33,670
  35,960
  38,365
  40,890
  43,541
  46,327
  49,254
  52,330
  55,562
  58,961
  62,534
  66,291
Retained Cash Flow (-), $m
  -1,914
  -1,950
  -2,027
  -2,107
  -2,189
  -2,275
  -2,365
  -2,460
  -2,558
  -2,662
  -2,772
  -2,887
  -3,009
  -3,138
  -3,273
  -3,416
  -3,567
  -3,726
  -3,894
  -4,071
  -4,257
  -4,454
  -4,661
  -4,879
  -5,109
  -5,351
  -5,606
  -5,874
  -6,156
  -6,453
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  325
  352
  380
  409
  439
  471
  503
  537
  573
  610
  648
  688
  729
  772
  818
  865
  914
  965
  1,019
  1,075
  1,133
  1,194
  1,258
  1,325
  1,395
  1,469
  1,546
  1,626
  1,711
  1,799
Cash available for distribution, $m
  5,382
  6,351
  7,343
  8,379
  9,460
  10,588
  11,764
  12,991
  14,272
  15,609
  16,000
  17,460
  18,987
  20,584
  22,255
  24,005
  25,839
  27,761
  29,776
  31,890
  34,108
  36,436
  38,880
  41,448
  44,145
  46,978
  49,957
  53,087
  56,378
  59,838
Discount rate, %
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
  5,035
  5,522
  5,894
  6,162
  6,324
  6,381
  6,334
  6,190
  5,957
  5,646
  4,958
  4,578
  4,158
  3,714
  3,260
  2,811
  2,379
  1,975
  1,608
  1,281
  999
  761
  567
  411
  291
  200
  134
  87
  54
  33
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

T-Mobile US, Inc., together with its subsidiaries, provides mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands. The company offers voice, messaging, and data services to approximately 71 million customers in the postpaid, prepaid, and wholesale markets. It also provides wireless devices, including smartphones, tablets, and other mobile communication devices, as well as accessories that are manufactured by various suppliers. The company offers services, devices, and accessories under the T-Mobile and MetroPCS brands through its owned and operated retail stores, as well as Websites. T-Mobile US, Inc. also sells its devices and accessories to dealers and other third party distributors for resale through independent third-party retail outlets and various third-party Websites. As of December 31, 2016, it had approximately 2,000 T-Mobile and MetroPCS retail locations, including stores and kiosks. The company was founded in 1994 and is headquartered in Bellevue, Washington. T-Mobile US, Inc. is as a subsidiary of Deutsche Telekom Holding B.V.

FINANCIAL RATIOS  of  T-Mobile US (TMUS)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

TMUS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TMUS stock intrinsic value calculation we used $40604 million for the last fiscal year's total revenue generated by T-Mobile US. The default revenue input number comes from 2017 income statement of T-Mobile US. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TMUS stock valuation model: a) initial revenue growth rate of 8.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.9%, whose default value for TMUS is calculated based on our internal credit rating of T-Mobile US, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of T-Mobile US.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TMUS stock the variable cost ratio is equal to 53.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $14417 million in the base year in the intrinsic value calculation for TMUS stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6% for T-Mobile US.

Corporate tax rate of 27% is the nominal tax rate for T-Mobile US. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TMUS stock is equal to 0.8%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TMUS are equal to 134.8%.

Life of production assets of 10 years is the average useful life of capital assets used in T-Mobile US operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TMUS is equal to -17.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $22559 million for T-Mobile US - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 832 million for T-Mobile US is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of T-Mobile US at the current share price and the inputted number of shares is $54.9 billion.

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COMPANY NEWS

▶ [$$] T-Mobile Forges Deals With Pandora, Live Nation   [Aug-15-18 08:44PM  The Wall Street Journal]
▶ [$$] T-Mobile Forges Deals With Pandora, Live Nation   [02:17PM  The Wall Street Journal]
▶ Why Sprint Stock Should Be Avoided   [Aug-10-18 11:38AM  InvestorPlace]
▶ SoftBank COO Claure Talks Turnaround Efforts, T-Mobile Deal   [Aug-09-18 03:16PM  Bloomberg Video]
▶ Why T-Mobile Stock Needs the Sprint Merger   [Aug-08-18 11:12AM  InvestorPlace]
▶ T-Mobile Breakout Could Signal Big Upside   [09:54AM  Investopedia]
▶ Why Sprint Corp. Stock Jumped Today   [03:26PM  Motley Fool]
▶ Analysts: Sprint/T-Mobile merger approval remains a coin toss   [01:24PM  American City Business Journals]
▶ [$$] Telecom Companies Are Running Out of Time to Make Deals   [Aug-05-18 07:41PM  The Wall Street Journal]
▶ Sprint gets ensnared in catch-22 that could cost $600M   [02:55PM  American City Business Journals]
▶ Here's What's New With T-Mobile US, Inc.   [10:49AM  Motley Fool]
▶ [$$] T-Mobile, Sprint Add Customers as They Push Toward Merger   [Aug-01-18 08:41PM  The Wall Street Journal]
▶ T-Mobile: 2Q Earnings Snapshot   [06:31PM  Associated Press]
▶ T-Mobile Delivers Its Best Q2 Ever   [04:05PM  Business Wire]
▶ Sprint Is No Walk in the Park   [02:34PM  TheStreet.com]
▶ 4 takeaways from Sprint's earnings call   [01:23PM  American City Business Journals]
▶ National security agencies want FCC to wait on Sprint/T-Mobile merger   [Jul-31-18 03:12PM  American City Business Journals]
▶ Nokia's North Texas operations helping build T-Mobile's 5G network   [Jul-30-18 03:40PM  American City Business Journals]
▶ [$$] Nokia and T-Mobile US forge $3.5bn telecoms supply deal   [Jul-29-18 10:08PM  Financial Times]
▶ Which Major Carrier Offers the Cheapest Unlimited Plan?   [Jul-28-18 12:39PM  Motley Fool]
▶ T-Mobile tells FCC: Don't let Sprint merger hinder spectrum bid   [Jul-26-18 03:16PM  American City Business Journals]
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