T-Mobile Cashflow based valuation

Assumptions:

• T-Mobile (NYSE: TMUS) will grow at CARG of 5% for the next five years. Zero growth is assumed in perpetuity
• Standard CAPM assumptions as CAPM is used to drive the cost of equity.
• Growth of CAPEX will slow down in the next few years amid completion of the deployment of LTE networks.

• NASDAQ composite returns are used as a near approximation for market returns.   

FocusEquity estimates

Comments 

According to the valuation, T-Mobile is a good long-term investment opportunity, and based on current scenario, its stock has the ability to post capital gains of around 39% in the long-term.