3 Ways T-Mobile Can Grow Faster Than You Think
Shares of T-Mobile (NASDAQ: TMUS) surged late last week after the company reported its first-quarter earnings. Though T-Mobile reported flat overall revenue growth, that was mainly due to store closures affecting low-margin equipment revenue, which was impacted by store closures due to COVID-19. Meanwhile, the company's service revenue, which is really the main driver for telecom profits, rose 5% in the quarter. And within that 5% growth, the most important category of branded postpaid service revenue grew an even higher 7%.
While 7% postpaid service revenue growth doesn't sound like anything special when compared with other high-growth technology names, in the wireless industry during a pandemic, that growth is downright heroic. In fact, T-Mobile accounted for 70% of the entire industry's growth in the first quarter, marking the 25th straight quarter it's led the industry in net additions.
However, the big driver of T-Mobile's stock price won't be its first-quarter numbers, but rather where it's going. The company just closed its huge acquisition of Sprint on April 1 after two years of regulatory scrutiny, which could potentially lead to even bigger and better gains down the road. With the integration of Sprint under way, T-Mobile is set to grow even faster by pursuing three big new avenues for growth.
Source Fool.com
