A 13 percent one-day drop prices SpaceX as an immediate wireless rival. T-Mobile still guides to $18.6 billion of 2026 free cash and about $40.5 billion of 2027 EBITDA. Seven times that EBITDA is $196.
Key points
- $18.6 billion is the midpoint of 2026 adjusted free cash guidance after the July raise.
- 6.0 times 2027 EBITDA of $40.5 billion is what $148.57 plus $82 billion of net debt implies.
- 12.3 percent free-cash yield on 1.08 billion shares at the verified price.
The call
The market is too pessimistic. At $148.57 the equity is $160 billion. Add $82 billion of net debt and you need only $40.5 billion of 2027 EBITDA at six times, or a 12 percent cash yield, to hold the shares. That is a distressed multiple for a business still adding accounts.
I believe 2027 EBITDA lands near $40.5 billion and free cash near $19.8 billion. SpaceX buying Grain’s 800 MHz licenses does not rewrite 2026 or 2027 cash. Urban satellite capacity is thin, the T-Mobile partnership is unamended, and October 28 results will show whether July’s churn warning was transitory.
Adjusted free cash flow ($ billions)Company reports through 2025; 2026-27E are this desk. As of Oct 9, 2026.
Valuation
| Item | Figure |
|---|
| 2027 Core Adj. EBITDA (desk) | $40.5 billion |
| Net debt (desk, year-end 2026) | $82 billion |
| Enterprise value at 7.25 times | $294 billion |
| Equity value | $212 billion |
| Diluted shares | 1.08 billion |
| 12-month target | $196 |
Wireless cash compounders have long cleared seven times forward EBITDA when growth is mid-single digit and FCF conversion is high. Seven-and-a-quarter times is still below the pre-scare range. Upside is about 32 percent if the multiple merely normalizes; downside is limited if EBITDA merely holds the 2026 guide.
Risks
- Postpaid account churn stays elevated after the legacy-plan reprice; watch the October 28 account-add print versus 250,000.
- SpaceX wins FCC approval and a terrestrial build that overlaps T-Mobile’s densest markets; watch the Grain docket.
- Higher device costs and bad debt ($398 million in Q2) cut FCF below $18 billion; watch cash taxes and subsidy language.
What would change my mind
A 2026 free-cash cut below $17.5 billion or a disclosed end to the Starlink partnership.