To The Moon

$T-Mobile US(TMUS)$’s second-quarter report was profitable and cash-generative, yet its shares fell 10.8% on July 23. The decline shows that investors are prioritising subscriber momentum over an earnings beat in an increasingly mature US wireless market.

T-Mobile reported earnings of $2.99 per share, ahead of the approximately $2.59 expected by analysts. Average revenue per postpaid account increased 2% year over year to $152.91, while management raised its 2026 adjusted free-cash-flow forecast to $18.4 billion–$18.8 billion. Reuters’ July 23 report provides the results and outlook.

The problem was the forward subscriber guidance. T-Mobile expects approximately 250,000 postpaid account additions in the third quarter, below analysts’ expectation of roughly 304,000 and below the 277,000 added in Q2. Management attributed the expected slowdown partly to moving customers from legacy plans to more expensive premium offerings.

That strategy has a logical bullish case. Higher-value plans can increase revenue per account, and customers may accept higher prices when the plans include additional data, device upgrades or bundled services. T-Mobile’s stronger cash-flow forecast suggests pricing and operating efficiencies are currently supporting the business.

The bearish risk is churn. Customers comparing higher prices may switch to AT&T, Verizon or lower-cost alternatives. In a saturated wireless market, acquiring a replacement customer can require promotions and device subsidies that reduce the benefit from higher prices. T-Mobile’s expansion into fibre could diversify revenue, but its fibre footprint remains considerably smaller than those of AT&T and Verizon.

The stock fell from $191 to $170.42 and closed close to its $169.75 session low. That is a technically weak earnings reaction because selling continued through the session rather than reversing.

TMUS Weekly Chart

$T-Mobile US(TMUS)$’s weekly chart remains technically weak, with price still trading beneath a well-defined descending trendline and the most recent breakout attempt failing near the mid-$250s, reinforcing the pattern of lower highs. The stock is now testing the $158–$166 support zone, which is the first area where buyers may attempt to stabilize the decline; however, a weekly close below $158 would increase the risk of a deeper move toward the stronger $147–$155 support band.

Because the broader trend has not yet reversed, buying calls here would be premature. The cleaner trade would be a 45–75 DTE $165/$150 put debit spread after a confirmed weekly close below $158, targeting the lower support zone while limiting downside risk and volatility exposure. Conversely, if TMUS holds support and later closes decisively above the descending trendline, the bearish thesis would weaken and a bullish trade could then be reconsidered.

The evidence leans neutral to mildly bearish in the near term. Cash flow and pricing remain constructive, but slowing account growth and churn risk explain the repricing. The cautious view would be invalidated by subscriber additions recovering faster than expected while average revenue and free cash flow continue rising. It would become more bearish if higher prices cause persistent customer losses. This is personal opinion for education and is not financial advice.

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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.