T-Mobile's UBS Presentation Reaffirms Guidance, Underscores Persistent Execution Risks

What happened

T-Mobile's management presented at the UBS Global Media and Communications Conference, reiterating their commitment to network leadership and the UScellular integration with revised synergy targets of $1.0–1.2 billion annually and $2.2–2.6 billion in costs. They emphasized raised 2025 guidance for postpaid net adds and free cash flow, but highlighted elevated capex of ~$10 billion for 5G densification and integration, reflecting ongoing capital intensity. Despite strong fundamentals, including ~140 million subscribers and rising FCF, the stock is down ~13% over the past year due to market concerns about sustained cash generation in a maturing, competitive industry. The presentation aimed to bolster confidence in the cash-compounder thesis, but offered no new material data to alleviate fears about high leverage and execution missteps. Investors were left with the same core narrative: T-Mobile's valuation appears attractive, but the margin of safety hinges on delivering synergies and managing debt.

Implication

The UBS presentation reinforced T-Mobile's strategic priorities but did not change the fundamental investment case, which depends on successful integration and sustained FCF amid high capex. Current holders must closely monitor quarterly metrics like postpaid net adds, churn, and FCF versus capex to assess if management can meet its aggressive guidance. New investors might find the stock undervalued at ~19.6x P/E, but should size positions cautiously due to the $78 billion debt load and integration risks that could erode equity value quickly. Any deviation from synergy timelines or FCF expectations could prompt a downgrade from 'POTENTIAL BUY' to 'WAIT,' making it critical to watch for signs of execution slippage or competitive pressure. Ultimately, confirmation that FCF remains robust through the investment cycle is necessary to upgrade to 'STRONG BUY,' so the stock represents a watch-and-wait opportunity with measured sizing for now.

Thesis delta

The thesis remains unchanged: T-Mobile is a potential buy due to strong fundamentals and network moat, but high leverage and execution risks argue for cautious sizing. No new information from the UBS conference shifts this view; investors should continue to monitor FCF versus capex and UScellular integration progress as outlined in the DeepValue report. Upgrading to a strong buy requires evidence that current FCF levels are sustainable and deleveraging is on track, which the presentation did not provide.