T-Mobile fell 13% on SpaceX fears. At $148.57, an 11.7% 2026 cash yield and buybacks point to $194.17.
Key points
- $18.6 billion in 2026 of guided free cash flow after network spending leaves an 11.7% yield in 2026.
- 277,000 net adds in Q2 2026 in postpaid accounts with monthly revenue per account up 2% from Q2 2025.
- 13.3% drop on Oct 9 2026 in one day on the SpaceX spectrum headline discounts years of future risk.
The call
Fear now prices T-Mobile as if satellite steals city customers next year. At $148.57 the price needs flat cash flow and stalled account growth to stay here.
Revenue holds up while cash flow compoundsSEC XBRL to Q2 FY26; Q3-Q4 FY26E author estimates.
Cash flow says the core still compounds. I expect $20.0 billion of free cash flow in 2027. That is $19.42 per share on 1.03 billion shares.
What the target is worth at different cash multiplesAuthor estimates for 2027; multiples times $19.42 cash flow per share.
Valuation
| Item | Figure |
|---|
| 2027 free cash flow | $20.0 billion |
| Shares in 12 months | 1.03 billion |
| Cash flow per share in 2027 | $19.42 |
| Multiple paid | 10 times 2027 cash flow |
| Target in 12 months | $194.17 |
Ten times cash flow fits a slow growth phone compounder with a 3.1% yield. The $8.5 billion left for returns buys more shares while weak. A 31% gain against single digit downside makes this a strong buy.
Risks
- Satellite rivals win city share in 2027 if regulators approve spectrum use fast and phones ship early in 2028.
- Cable bundles force a price response in 2027 if promotions cut net adds in Q4 2026 and lift churn in Q1 2027.
- High debt near $84.6 billion at Jun 30 2026 strains if rates stay high in 2027 and fiber costs run over plan in 2027.
What would change my mind
Losing phone accounts in two straight quarters through mid 2027 with flat cash flow in 2027 would end the growth case.