Yahoo Finance The five-year decline in earnings for T-Mobile US NASDAQ:TMUS) isn't encouraging, but shareholders are still up 119% over that period
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of T-Mobile US, Inc. (NASDAQ:TMUS) stock is up an impressive 119% over the last five years. Then again, the 8.4% share price decline hasn't been so fun for shareholders.
Since the long term performance has been good but there's been a recent pullback of 5.9%, let's check if the fundamentals match the share price.
View our latest analysis for T-Mobile US
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
T-Mobile US' earnings per share are down 11% per year, despite strong share price performance over five years.
This means it's unlikely the market is judging the company based on earnings growth. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.
On the other hand, T-Mobile US' revenue is growing nicely, at a compound rate of 18% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
T-Mobile US is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling T-Mobile US stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
It's good to see that T-Mobile US has rewarded shareholders with a total shareholder return of 14% in the last twelve months. Having said that, the five-year TSR of 17% a year, is even better. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 4 warning signs for T-Mobile US that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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