● Optimal Entry: Look for buying opportunities near $245.30, a key support level where recent price action suggests an attractive risk-reward opportunity.
● Downside Protection: Set a stop loss at $220 to limit potential losses in case of adverse price movements.
● Upside Target: The primary profit-taking zone is $284.60, offering a 16% return from the entry point.
● Strong Q1 2025 Performance: T-Mobile reported Q1 revenue of $20.89 billion, a 6.6% year-over-year increase, and an adjusted EPS of $2.58, up 29% YoY. Net income reached $3 billion, marking 24% YoY growth.
● Subscriber Growth: The company added 903 000 postpaid phone subscribers in Q4 2024, surpassing competitors Verizon and AT&T. For 2025, T-Mobile projects adding 5.5 to 6 million new postpaid connections, significantly higher than the 2024 figures.
● Defensive Hedge Amid Volatility: The network provider has a low beta of 0.64, indicating lower volatility compared to the broader market, making it a potentially more stable investment during market downturns. Additionally, telecom services are essential and demand tends to remain stable even during economic slowdowns, providing a defensive buffer in uncertain times.
Double Bottom Formation: The chart is exhibiting a double bottom pattern, a bullish reversal signal characterised by two consecutive troughs at a similar price level, forming a "W" shape. This pattern suggests that the price has found a strong support level. A breakout above the intermediate peak, around $254, would confirm the reversal, potentially indicating the start of an upward trend.
MACD Bullish Crossover: The moving average convergence divergence (MACD) indicator has recently shown a bullish crossover, where the MACD line crosses above the signal line. This crossover is often interpreted as a sign of increasing upward momentum, reinforcing the potential for a bullish move.
Price Above 200-Day Simple Moving Average (SMA): The current price is trading above its 200-day SMA, a widely followed long-term trend indicator. Trading above this moving average suggests a prevailing bullish trend, indicating that the asset is in a strong position and may continue to perform well.
● Competitive Pressure: Competitors like AT&T and Verizon are aggressively pursuing AI-driven network optimisations and expanding their service offerings, potentially outpacing T-Mobile in innovation and customer value propositions.
● Debt Levels: Recent acquisitions and network enhancements have significantly increased TMUS’ debt levels, potentially limiting its financial flexibility for future technological investments.
Disclaimer:
*Any opinions, views, analysis, or other information provided in this article is provided by BROKSTOCK SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BROKSTOCK SA does not warrant the correctness, accuracy, timeliness, reliability, or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions, and all decisions are made at your own risk. BROKSTOCK SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss, including, without limitation, any loss of profit which may arise directly or indirectly from the use of the market commentary. The content contained within the article is subject to change at any time without notice. BROKSTOCK SA is an authorised financial services provider - FSP No. 51404. T&Cs and Disclaimers are applicable: https://brokstock.co.za/
** This article was prepared by BROKSTOCK analyst Maboko Seabi
