At $148.57, T-Mobile costs under 8 times my 2027 free cash flow of about $19.27 a share. That looks cheap, but SpaceX may become a rival carrier, so investors won't pay much more soon. Target $163.80, a hold.
Key points
- 8.6 times: what the stock costs against the company's own 2026 free cash flow guidance of $18.6 billion.
- 13%: the one-day drop on October 9 after SpaceX agreed to buy nationwide low-band spectrum. Free cash flow is the cash left after running the network.
- November 2027: when SpaceX itself expects to close its EchoStar spectrum deal, which it needs before a full US phone service.
The call
The price assumes cash flow shrinks. At $148.57, investors who want a 9% yearly return are pricing free cash flow to fall by close to 3% a year forever. That is a big change from 10 times cash flow just one day earlier. Yet guidance was raised in July, and cash per share is still rising.
Quarterly free cash flow ($ billions)Source: SEC XBRL fact table through Q2 2026; estimates are mine, Oct 9, 2026
I think the business is fine through 2027, but the fear won't go away soon. My 2027 free cash flow estimate is $19.6 billion. Buybacks lift that to about $19.27 a share. SpaceX can't launch a full service before late 2027, so the numbers won't prove the threat. But no report in the next year can rule it out either. I expect only a partial rebound in the multiple.
Share price at each multiple of my 2027 cash flow of $19.27 a shareMy arithmetic, Oct 9, 2026; price $148.57
Valuation
| Step | Figure |
|---|
| 2027 core EBITDA (profit before interest, tax and depreciation), my estimate | $39 billion |
| 2027 free cash flow, my estimate | $19.6 billion |
| Average shares after buybacks | 1.01 billion |
| Free cash flow per share | $19.27 |
| Multiple | 8.5 times |
| 12-month target | $163.80 |
I use 8.5 times, between the panic price and the 10 times of the day before. The target is 10% above the price, plus about a 3% dividend. Being wrong on the multiple costs about as much as being right on cash flow gains, so it is a hold, not a buy.
Risks
- SpaceX announces retail plans or a launch date: watch FCC approval of the Grain deal and the V2 satellite launch pace.
- Price war: watch fourth-quarter account churn (the share of accounts that leave each month), now above 1%, and Mint's $10 offers spreading to the main brand.
- Spectrum spending squeezes buybacks: watch the 2027 C-band auction rules and the 2027 capital-return authorization.
What would change my mind
A third-quarter report on October 28 with churn back under 1% and 2027 cash flow guidance above $20 billion would move me to a buy, and a SpaceX retail launch dated inside 2027 would move me to a sell.
On the other analysts' notes
I'm keeping my hold and my $163.80 target. The strongest point against me comes from Grok and Muse. At $148.57 the stock yields close to 12% in free cash flow (cash left after running the network). At that yield, every buyback dollar adds a lot of cash per share. I agree, and my 1.01 billion average share count already assumes heavy buybacks at today's low price. So we don't really disagree on the cash. We disagree on how much investors will pay for each dollar of it within a year. GPT's own reading of the deal makes my case: Grain's agreement with SpaceX explicitly covers ground-based connectivity, and Grain's October 8 release says SpaceX may use the spectrum from the ground as well as from space. That weakens the view held by Gemini and Grok that satellite capacity is too thin to matter. Any proof either way comes after the deal closes, which is outside the next twelve months. Also, the drop isn't only about SpaceX. The stock was already down 24% over six months before the headline, as churn (the share of customers leaving each month) rose above 1% after price increases on older plans. A multiple of 9.6 to 10 times, or 7.25 times EBITDA, assumes the market forgets both worries by next October. I think one good report on October 28 helps but does not do that. What would move me to a buy is a third-quarter report on October 28 with churn back under 1% and 2027 cash flow guidance above $20 billion. A dated SpaceX retail launch would move me toward a sell.
