In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)
Weighted Average Cost of Capital (WACC)
FCFF Growth Rate (g)

T-Mobile US Inc., free cash flow to the firm (FCFF) forecast

US$ in millions, except per share data

Year	Value	FCFF_t or Terminal value (TV_t)	Calculation	Present value at 8.27%
0¹	FCFF₀	19,385
1	FCFF₁	20,049	= 19,385 × (1 + 3.42%)	18,518
2	FCFF₂	20,629	= 20,049 × (1 + 2.89%)	17,600
3	FCFF₃	21,117	= 20,629 × (1 + 2.37%)	16,640
4	FCFF₄	21,505	= 21,117 × (1 + 1.84%)	15,652
5	FCFF₅	21,786	= 21,505 × (1 + 1.31%)	14,646
5	Terminal value (TV₅)	317,118	= 21,786 × (1 + 1.31%) ÷ (8.27% – 1.31%)	213,184
Intrinsic value of T-Mobile US Inc. capital				296,240
Less: Short-term and long-term debt, including financing lease liabilities (fair value)				84,475
Intrinsic value of T-Mobile US Inc. common stock				211,765

Intrinsic value of T-Mobile US Inc. common stock (per share)				$195.68
Current share price				$182.68

Based on: 10-K (reporting date: 2025-12-31).

¹ See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

T-Mobile US Inc., cost of capital

	Value¹	Weight	Required rate of return²	Calculation
Equity (fair value)	197,697	0.70	10.35%
Short-term and long-term debt, including financing lease liabilities (fair value)	84,475	0.30	3.39%	= 4.22% × (1 – 19.56%)

Based on: 10-K (reporting date: 2025-12-31).

¹ US$ in millions

Equity (fair value) = No. shares of common stock outstanding × Current share price
= 1,082,204,717 × $182.68
= $197,697,157,701.56

Short-term and long-term debt, including financing lease liabilities (fair value). See details »

² Required rate of return on equity is estimated by using CAPM. See details »

Required rate of return on debt. See details »

Required rate of return on debt is after tax.

Estimated (average) effective income tax rate
= (23.00% + 22.90% + 24.40% + 17.70% + 9.80%) ÷ 5
= 19.56%

WACC = 8.27%

FCFF growth rate (g) implied by PRAT model

T-Mobile US Inc., PRAT model

	Average	Dec 31, 2025	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Selected Financial Data (US$ in millions)
Interest expense, net		3,774)	3,411)	3,335)	3,364)	3,342)
Net income		10,992)	11,339)	8,317)	2,590)	3,024)

Effective income tax rate (EITR)¹		23.00%	22.90%	24.40%	17.70%	9.80%

Interest expense, net, after tax²		2,906)	2,630)	2,521)	2,769)	3,014)
Add: Dividends declared		4,240)	4,302)	747)	—)	—)
Interest expense (after tax) and dividends		7,146)	6,932)	3,268)	2,769)	3,014)

EBIT(1 – EITR)³		13,898)	13,969)	10,838)	5,359)	6,038)

Short-term debt		5,135)	4,068)	3,619)	5,164)	3,378)
Short-term debt to affiliates		—)	—)	—)	—)	2,245)
Short-term financing lease liabilities		1,163)	1,175)	1,260)	1,161)	1,120)
Long-term debt		79,649)	72,700)	69,903)	65,301)	67,076)
Long-term debt to affiliates		1,498)	1,497)	1,496)	1,495)	1,494)
Long-term financing lease liabilities		1,107)	1,151)	1,236)	1,370)	1,455)
Stockholders’ equity		59,203)	61,741)	64,715)	69,656)	69,102)
Total capital		147,755)	142,332)	142,229)	144,147)	145,870)
Financial Ratios
Retention rate (RR)⁴		0.49	0.50	0.70	0.48	0.50
Return on invested capital (ROIC)⁵		9.41%	9.81%	7.62%	3.72%	4.14%
Averages
RR	0.49
ROIC	6.94%

FCFF growth rate (g)⁶	3.42%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

¹ See details »

2025 Calculations

² Interest expense, net, after tax = Interest expense, net × (1 – EITR)
= 3,774 × (1 – 23.00%)
= 2,906

³ EBIT(1 – EITR) = Net income + Interest expense, net, after tax
= 10,992 + 2,906
= 13,898

⁴ RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [13,898 – 7,146] ÷ 13,898
= 0.49

⁵ ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 13,898 ÷ 147,755
= 9.41%

⁶ g = RR × ROIC
= 0.49 × 6.94%
= 3.42%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value₀ × WACC – FCFF₀) ÷ (Total capital, fair value₀ + FCFF₀)
= 100 × (282,172 × 8.27% – 19,385) ÷ (282,172 + 19,385)
= 1.31%

where:

Total capital, fair value₀ = current fair value of T-Mobile US Inc. debt and equity (US$ in millions)
FCFF₀ = the last year T-Mobile US Inc. free cash flow to the firm (US$ in millions)
WACC = weighted average cost of T-Mobile US Inc. capital

FCFF growth rate (g) forecast

T-Mobile US Inc., H-model

Year	Value	g_t
1	g₁	3.42%
2	g₂	2.89%
3	g₃	2.37%
4	g₄	1.84%
5 and thereafter	g₅	1.31%

where:
g₁ is implied by PRAT model
g₅ is implied by single-stage model
g₂, g₃ and g₄ are calculated using linear interpolation between g₁ and g₅

Calculations

g₂ = g₁ + (g₅ – g₁) × (2 – 1) ÷ (5 – 1)
= 3.42% + (1.31% – 3.42%) × (2 – 1) ÷ (5 – 1)
= 2.89%

g₃ = g₁ + (g₅ – g₁) × (3 – 1) ÷ (5 – 1)
= 3.42% + (1.31% – 3.42%) × (3 – 1) ÷ (5 – 1)
= 2.37%

g₄ = g₁ + (g₅ – g₁) × (4 – 1) ÷ (5 – 1)
= 3.42% + (1.31% – 3.42%) × (4 – 1) ÷ (5 – 1)
= 1.84%

T-Mobile US Inc. (NASDAQ:TMUS)

Present Value of Free Cash Flow to the Firm (FCFF)

Intrinsic Stock Value (Valuation Summary)

Weighted Average Cost of Capital (WACC)

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

FCFF growth rate (g) implied by single-stage model

FCFF growth rate (g) forecast