T-Mobile US Inc TMUS 1.21% delivered mixed results in Q1, beating consensus revenue estimates but missing on EPS. The market punished the stock with a 4.4 percent selloff in Tuesday’s session, but Citi analyst Michael Rollins believes the selling pressure is an overreaction.
Overall, Rollins believes that the positives for T-Mobile outweigh the negatives in the Q1 report.
“We remain a buyer of T-Mobile and believe the company’s playbook remains well-positioned in 2016 to generate better top-line performance, while generating in-line ‘cash’ OIBDA performance,” Rollins explained.
In terms of positives, Rollins highlighted increasing postpaid net adds guidance, declining postpaid and prepaid churn rates, “cash” phone average revenue per user stabilization, expanding OIBDA margins, rising prepaid and postpaid distribution and better prepaid net adds.
On the negative side, he mentioned greater-than-expected leasing in Q1 inflated headline OIBDA, free-cash-flow was weak and non-cash capital spend jumped significantly.
Overall, Citi remains…
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