AT&T (T) added more wireless postpaid phone subscribers in the December quarter than T-Mobile US (TMUS), keeping its streak alive. TMUS stock fell on Friday as its subscriber additions came in slightly below estimates while T stock rose.
XAT&T added 880,000 postpaid phone subscribers, topping estimates of 804,000. T-Mobile added 844,000, slightly below estimates of 854,000.
"(T-Mobile's) postpaid phone net adds were essentially in line with the sell-side, though investors may have been hoping for more given the high bar management has set over the years by consistently beating expectations," RBC Capital analyst Kutgun Maral said in a report to clients.
AT&T stock and T-Mobile stock both pre-announced fourth quarter wireless subscriber results on Thursday coinciding with financial conferences. The companies didn't pre-announce fourth-quarter earnings.
AT&T has now topped T-Mobile in wireless postpaid subscriber additions for three straight quarters. Before the June 2021 quarter, T-Mobile had led the industry in postpaid phone subscriber additions for about seven years. High-margin postpaid phone subscribers spend the most monthly.
TMUS Stock: Buyback A Possible Catalyst
TMUS stock tumbled 5% to close at 109.74 on the stock market today. T stock rose 2.7% to 26.29.
Shares in AT&T and Verizon Communications (VZ) are off to a good start in early 2022 after lagging last year.
Well Fargo analyst Eric Luebchow upgraded AT&T stock to equal-weight on Friday.
"While we expect some modest (revenue) headwinds from promotional discounts, we still expect 3.8%-plus wireless service revenue growth in 2022, which should be ahead of both T-Mobile and Verizon," he said in a report. "While 2022 postpaid phone net adds will likely slow across the industry by about 20%, we still think AT&T can deliver 2.3 million additions and take a healthy 26% of industry gross adds."
Meanwhile, T-Mobile stock retreated 14% in 2021.
"TMUS shares materially underperformed in 2021 as 2022-2023 EBITDA (earnings before interest, taxes, depreciation and amortization) expectations faded a bit and investors shed wireless stocks on concerns around competition and eventual post-pandemic phone net add slowdown, as well as macro shifts," Credit Suisse analyst Douglas Mitchelson said in his note to clients. He added that a stock buyback announcement would be a catalyst for TMUS stock.
TMUS stock holds a Relative Strength Rating of only 26 out of a best-possible 99, according to IBD Stock Checkup.
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