T-Mobile US Inc. (NASDAQ:TMUS)

The valuation ratios exhibit a transition from high volatility and elevated multiples in 2022 toward a period of stabilization and gradual compression by early 2026. A distinct divergence is noted between earnings-based multiples, which trended downward, and asset-based multiples, which experienced a period of significant expansion before moderating.

Price to Earnings (P/E) Ratio

A significant correction is observed in the P/E ratio, which peaked at 113.98 in September 2022. Following this peak, the ratio declined sharply throughout 2023, reaching a low of 20.96 in September 2023. From late 2023 through March 2026, the ratio remained relatively stable, fluctuating within a narrow band between 19.17 and 24.98, indicating a normalization of the stock's valuation relative to its net income.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio mirrors the trajectory of the P/E ratio, showing a peak of 36.01 in September 2022 followed by a consistent downward trend. The ratio entered a stabilization phase in 2023, maintaining values between 12.05 and 15.82. By March 2026, the ratio reached its lowest point of 11.24, suggesting a long-term improvement in operating profitability relative to the market price.

Price to Sales (P/S) Ratio

The P/S ratio remained comparatively stable between 1.98 and 2.45 from March 2022 through March 2024. A period of valuation expansion occurred during 2024, with the ratio peaking at 3.27 in December 2024. This was followed by a gradual decline, returning to 2.23 by March 2026, effectively reverting to the levels seen in early 2022.

Price to Book Value (P/BV) Ratio

Unlike the earnings multiples, the P/BV ratio showed a sustained upward trend for several years. Starting at 2.27 in March 2022, the ratio climbed steadily to a peak of 4.87 in March 2025. This indicates a growing premium over the company's book value over time. However, a contraction began in the second quarter of 2025, with the ratio descending to 3.62 by March 2026.

Overall, the data indicates a shift in investor valuation metrics. The substantial contraction in P/E and P/OP multiples suggests that earnings growth outperformed price appreciation during the observed period. Simultaneously, the peak and subsequent decline in P/S and P/BV ratios suggest a cycle of valuation expansion that peaked between late 2024 and early 2025 before undergoing a corrective phase.

The financial data reveals a significant evolution in the valuation profile from early 2022 through early 2026, transitioning from a period of extreme valuation premiums to a more stabilized earnings-based multiple.

Earnings per Share (EPS) Growth

A consistent and substantial upward trajectory in EPS is observed, rising from 2.24 in March 2022 to a peak of 10.85 in June 2025. This growth indicates a significant expansion in profitability per share over the analyzed period, with the most aggressive growth occurring between March 2023 and March 2024.

Share Price Movement

The share price exhibited a general upward trend for the first three years, climbing from 126.80 in March 2022 to a peak of 262.18 in December 2024. Following this peak, a downward correction is noted through 2025 and the first quarter of 2026, with the price declining to 186.72 by March 31, 2026.

Price-to-Earnings (P/E) Ratio Compression

The P/E ratio underwent a dramatic compression during the period. Initially, valuation multiples were exceptionally high, peaking at 113.98 in September 2022. A sharp decline occurred throughout 2023, after which the ratio stabilized, fluctuating within a tighter range between 19.17 and 24.98. This compression indicates that the growth in earnings significantly outpaced the growth in share price, shifting the stock from a high-growth speculative valuation to a more mature, earnings-supported valuation.

Valuation Correlation

A strong inverse relationship is observed between the growth of EPS and the P/E ratio. As EPS increased from single digits to double digits, the P/E ratio normalized. The period between June 2023 and March 2026 reflects a state of relative valuation stability, where the P/E ratio remained consistently low despite fluctuations in the absolute share price.

The analysis of the valuation ratios indicates a significant shift in the relationship between market price and operating performance over the observed period. While the share price experienced a period of substantial growth, the operating profit per share grew at a more consistent and aggressive rate, leading to an overall compression of the Price to Operating Profit (P/OP) multiple.

Share Price Performance

The share price exhibited a general upward trajectory from $126.80 in March 2022 to a peak of $262.18 in December 2024. Following this peak, a corrective phase occurred, with the price declining to $186.72 by March 2026.

Operating Profit per Share Trends

Operating profit per share demonstrated steady and continuous growth throughout the entire period. Starting at $5.23 in March 2022, the figure rose consistently to reach $16.61 by March 2026, indicating a strong and sustained increase in operational profitability.

P/OP Ratio Evolution

The P/OP ratio underwent a dramatic contraction. Initial valuations were high and volatile, peaking at 36.01 in September 2022. A sharp decline followed throughout 2023, with the ratio dropping to 12.05 by September 2023. From March 2024 through March 2026, the ratio stabilized, fluctuating within a relatively narrow band between 11.24 and 15.82.

The divergence between the increasing operating profit and the fluctuating share price indicates that the market valuation shifted from a high-growth premium toward a valuation more closely aligned with actual operational earnings. The final P/OP ratio of 11.24 represents the lowest point in the recorded period, suggesting a more conservative valuation relative to the significantly expanded profit base.

The valuation trajectory of the equity exhibits a distinct cyclical pattern characterized by an initial period of stability, a sharp expansion in valuation multiples, and a subsequent correction toward historical norms.

Share Price Performance

The share price experienced a steady ascent from 126.80 in March 2022, reaching a peak of 262.18 by March 2025. Following this peak, a consistent downward trend emerged, with the price receding to 186.72 by March 2026.

Sales per Share Growth

In contrast to the volatility of the share price, sales per share demonstrated a linear and consistent upward trajectory. Values increased from 64.20 in March 2022 to 83.65 in March 2026, indicating a steady improvement in the underlying revenue generation per share over the analyzed period.

Price-to-Sales (P/S) Ratio Dynamics

The P/S ratio remained relatively stable between 1.98 and 2.45 from March 2022 through March 2024. A significant expansion occurred between June 2024 and March 2025, where the ratio climbed from 2.69 to a peak of 3.60, suggesting a period of increased market optimism or a valuation premium. Subsequently, the ratio underwent a contraction, falling back to 2.23 by March 2026, returning the valuation to levels comparable to those seen in 2022 and 2023.

The divergence between the consistently rising sales per share and the declining share price in the final four quarters indicates that the reduction in the P/S ratio was driven primarily by a compression of the valuation multiple rather than a decline in fundamental revenue performance.

The valuation metrics for the period between March 31, 2022, and March 31, 2026, reveal a period of significant expansion in the Price to Book Value (P/BV) ratio, primarily driven by share price appreciation rather than growth in the underlying book value.

Share Price Trends

A sustained upward trajectory in the share price is observed from March 2022, when the price stood at 126.80 US$, reaching a peak of 262.18 US$ by March 31, 2025. Following this peak, a corrective phase occurred, with the price declining to 186.72 US$ by March 31, 2026.

Book Value Per Share (BVPS) Stability

The book value per share remained relatively stable throughout the analyzed timeframe, with minimal volatility. After reaching a high of 57.12 US$ in December 2022, a gradual downward trend emerged, resulting in a BVPS of 51.63 US$ by March 31, 2026. The lack of substantial growth in BVPS indicates that the increase in market valuation was not supported by a corresponding increase in the company's net asset value.

Price to Book Value (P/BV) Ratio Analysis

The P/BV ratio exhibited a strong expansionary trend, rising from 2.27 in March 2022 to a maximum of 4.87 in March 2025. This expansion was the result of the divergence between the rapidly increasing share price and the stagnant or slightly declining BVPS. Following the peak in early 2025, the ratio contracted to 3.62 by March 31, 2026, mirroring the decline in share price during the final year of the period.