1. Eric Desautel
4/27/14
T-Mobile
Executive Summary
High-risk investors often find their niche in the electronics industry given its potential for very
rapid growth. T-Mobile falls into this category, especially now that they are recovering from
negative earnings in 2011 and 2012. However, because they currently do not pay dividends,
have a volatile stock price, and still see returns on investments significantly lower than the
industry average, I would recommend researching other companies if you plan to purchase
shares of an electronics or telecommunications firm.
Company Overview
Founded in 1990, T-Mobile International AG is a holding company for Deutsche Telekom AG's
mobile communications subsidiaries outside Germany. Its subsidiaries operate GSM, UMTS and
LTE-based cellular networks in Europe, the United States, Puerto Rico, and the U.S. Virgin
Islands. Globally, T-Mobile International subsidiaries have a combined total of approximately
230 million subscribers, making it the world’s tenth largest mobile phone service provider. T-
Mobile’s Market Value is approximately 23,324.54 million dollars with 802.45 million shares
outstanding currently trading at 29.05.
Analysis
This stock has been relatively stable with a 200-Day Moving Average of 29.80 (a .75 change in
price from today’s quote of 29.8) and has a S & P 500 52 week change of 16.93%. TMUS has a
Profit Margin of .14% and an Operating Margin of 4.73%. Their revenue is 24.42 billion and its
revenue per share is 36.29 dollars. As a member of such a risky, but at times very rewarding,

2. Eric Desautel
4/27/14
industry for investors, T-Mobile’s high P/E ratio of 122 may not come as a surprise. But one may
fail to realize that the telecommunications industry holds a ratio of 13.8, almost ten times less.
The reason for this is simple: the company only realized a net income of $35,000 for fiscal year
2013; the two previous years, they had net losses of $6.1 million & $4.3 million, respectively.
Even though they are now moving in the right direction, the fact that such a massive company
only managed to barely get out of the red so recently is quite an unsettling thought for a
potential investor. TMUS has an Earnings Growth of 631.43%, about 11.5 times greater than the
industry Earnings Growth (54.9%) for the year-end 2014. A more complete look at T-Mobile’s
suitability for investment is the PEG ratio, given their seemingly quick recovery. However, it
yields equally disappointing results, capping out at a staggering 14.44, compared to the
industry’s 0.94. This data indicates that not only are investors in the company seeing low
returns, it is also likely being overvalued, showing that the price may fall in 2014.
Liquidity
While equity investors may not see much appeal in T-Mobile, the firm published a current ratio
of 2.1 in 2013, surprisingly high compared to the industry’s 0.9. This shows that, despite their
instability, they have maintained their ability to pay off short-term debt and maintain
operations. While this may seem like a good sign for short-term lenders, T-Mobile is highly
reliant on their accounts receivables, with the account making up almost half of all current
assets last year. Moreover, while they have been able to maintain operations during rough
financial years, it has come at a hefty price. In 2013, operating expenses alone took away over
90% of T-Mobile’s $12 million in gross profit and in 2012, they were $17 million higher than

3. Eric Desautel
4/27/14
gross profit. With all of these statistics in mind, we see that although the company has a
seemingly stable revenue stream, they have high regular costs and often rely on receivables,
skewing the true value of their asset base.
Conclusion
TMUS is the forerunner in the initiative to move towards cell phone service without obligatory
contracts. In the past, cell phone providers such as Verizon, Sprint and AT&T and T-Mobile kept
a strong arm in the industry with two-year service agreements and early termination fees. T-
Mobile’s first major move was the termination of these two-year contracts to begin its
“uncarrier” initiative. T-Mobile seems to be on the right path but it is risky to invest in the
company. Some may say that it has growth potential because of their recent struggles, but the
current price is nearly at its peak since its 5 year low of about $6.00 in October 2010 (current
price: $29.05). This, along with the volatile stock price, low returns on investments/assets
compared to the industry, and no dividends paid whatsoever give little reason to purchase
shares at this time. Perhaps if you had invested in the company in 2010 and weathered the
hurricane they endured through the following two years (dividend-less, mind you), you could
have made a very profitable investment. But right now, the company is showing virtually no
incentives. Investors should hold off for now and see how the company’s competitive new
business initiatives pan out.