Please ensure Javascript is enabled for purposes of website accessibility

Why T-Mobile Stock Jumped Today

By Joe Tenebruso – Aug 7, 2020 at 7:22PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Un-carrier is working its way up the U.S. wireless rankings.

What happened

Shares of T-Mobile (TMUS 0.62%) climbed by 6.5% on Friday, following the wireless-network operator's strong second-quarter results. 

So what 

T-Mobile continues to enjoy some of the best growth in the U.S. telecom industry. It added more than 1.2 million net new customers in the second quarter. This figure includes 1.1 million postpaid subscribers, who pay monthly bills and are generally the most profitable and sought-after wireless customers.

Thanks to its blockbuster merger with Sprint, T-Mobile's total customer base now stands at 98.3 million, which places it ahead of AT&T (T 0.16%) and behind only Verizon (VZ 0.26%).

A person is pointing to an upwardly sloping chart.

T-Mobile stock rose sharply on Friday. Image source: Getty Images.

The merger with Sprint also led to strong growth in T-Mobile's key financial metrics. Revenue surged 59% to $17.7 billion, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 91.5%, to $7 billion.

Now what

If T-Mobile is to overtake Verizon, it will need to invest heavily in its new 5G network. That spending is likely to weigh on its near-term profits and cash production. But if T-Mobile can build a best-in-class fifth-generation network, the hard-charging company could eventually earn a place atop the wireless-subscriber rankings.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

T-Mobile US Stock Quote
T-Mobile US
$151.05 (0.62%) $0.93
Verizon Communications Stock Quote
Verizon Communications
$39.02 (0.26%) $0.10
AT&T Stock Quote
$19.12 (0.16%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.