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Telephone & Data Systems Inc. (TDS)
:TDS
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Telephone & Data Systems
(NYSE:TDS)
58Neutral
Telephone & Data Systems (TDS) vs. S&P 500 (SPY)
Market Cap
$3.68B
Dividend Yield0.47%
Average Volume (3M)1.06M
Price to Earnings (P/E)―
Beta (1Y)0.55
Revenue Growth-3.80%
EPS Growth83.27%
CountryUS
Employees7,900
SectorCommunication Services
Sector Strength81
IndustryTelecommunications Services
Share Statistics
EPS (TTM)-0.09
Shares Outstanding107,208,070
10 Day Avg. Volume1,118,821
30 Day Avg. Volume1,062,733
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap3.00
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.90
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$53.50Price Target Upside55.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Telephone & Data Systems Business Overview & Revenue Model
Company DescriptionTelephone and Data Systems, Inc., a telecommunications company, provides communications services in the United States. It operates through two segments: UScellular and TDS Telecom. The company offers wireless solutions to consumers and business and government customers, including a suite of connected Internet of things (IoT) solutions, and software applications for monitor and control, business automation/operations, communication, fleet and asset management, smart water solutions, private cellular networks and custom, and end-to-end IoT solutions; wireless priority services and quality priority and preemption options; smartphones and other handsets, tablets, wearables, mobile hotspots, routers, and IoT devices; and accessories, such as cases, screen protectors, chargers, and memory cards, as well as consumer electronics, including audio, home automation and networking products. It also provides replace and repair services; Trade-In program through which it buys customers' used equipment; internet connections and all-home WI-FI services; TDS TV+, an integrated cloud television platform that offers video content; local and long-distance telephone service, VoIP, and enhanced services; and broadband, IP-based services, and hosted voice and video collaboration services. The company sells its products through retail sales, direct and indirect sales, third-party retailers, and independent agents, as well as through ecommerce and telesales. As of December 31, 2021, it offers its services to customers 5 million wireless connections, and 1.2 million wireline and cable connections. The company was incorporated in 1968 and is headquartered in Chicago, Illinois.
How the Company Makes MoneyTelephone and Data Systems generates revenue primarily through its two main business segments, U.S. Cellular and TDS Telecom. U.S. Cellular, a subsidiary of TDS, earns money by providing wireless services, selling devices, and offering equipment installment plans to consumers and businesses. This includes revenue from voice, messaging, data, and other wireless services as well as handset and accessory sales. Meanwhile, TDS Telecom generates income through its wireline and cable services by offering broadband internet, video, and voice services to residential and commercial customers. The company leverages strategic partnerships with content providers and equipment manufacturers to enhance its service offerings. TDS also benefits from recurring revenue streams due to its subscription-based model, which ensures a stable cash flow from its extensive customer base.
Telephone & Data Systems Financial Statement Overview
Summary
TDS is facing challenges with declining revenues and profitability, negatively impacting its income statement. While the balance sheet shows resilience with stable equity, rising debt levels could pose future risks. Cash flow generation is strong, but sustaining positive free cash flow and improving net income is crucial. The company needs to address its revenue and cost structure to enhance overall financial performance.Income Statement
The company shows a declining revenue trend over the past years, with a noticeable decrease in the latest year. Net profit margins are negative, indicating losses, while EBIT and EBITDA margins have also suffered. The gross profit margin remains relatively strong, but overall profitability is under pressure due to high expenses or cost structure challenges.―
Balance Sheet
The company maintains a stable equity base with a reasonable debt-to-equity ratio. However, the increase in total debt over the years poses a risk. Stockholders' equity has been relatively stable, supporting the company's financial health, but the decline in total assets could be concerning. Return on equity is currently negative due to net losses.65
Cash Flow
The operating cash flow remains strong, indicating solid cash generation abilities. Free cash flow has improved significantly from prior negative values, reflecting better capital management. However, the free cash flow to net income ratio is skewed due to negative net income, and the company's ability to sustain this trend is crucial for future stability.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.96B | 5.16B | 5.41B | 5.33B | 5.22B | Gross Profit |
| 2.83B | 2.83B | 2.85B | 2.86B | 2.87B | EBIT |
| 63.00M | -414.00M | 328.00M | 477.00M | 476.00M | EBITDA |
| 1.20B | 682.00M | 1.08B | 1.18B | 1.19B | Net Income Common Stockholders |
| -28.00M | -500.00M | 62.00M | 156.00M | 226.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 384.00M | 236.00M | 360.00M | 367.00M | 1.43B | Total Assets |
| 13.68B | 13.92B | 14.55B | 13.49B | 12.53B | Total Debt |
| 5.10B | 5.14B | 4.80B | 4.04B | 4.50B | Net Debt |
| 4.74B | 4.91B | 4.44B | 3.67B | 3.07B | Total Liabilities |
| 7.80B | 7.91B | 7.93B | 6.75B | 6.92B | Stockholders Equity |
| 5.09B | 5.20B | 5.85B | 5.93B | 4.80B |
| Cash Flow | Free Cash Flow | |||
| 261.00M | -199.00M | -620.00M | -48.00M | 164.00M | Operating Cash Flow |
| 1.15B | 1.14B | 1.16B | 1.10B | 1.53B | Investing Cash Flow |
| -754.00M | -1.33B | -1.78B | -2.46B | -1.51B | Financing Cash Flow |
| -277.00M | 56.00M | 613.00M | 321.00M | 957.00M |
Telephone & Data Systems Technical Analysis
Negative
34.31
Price Trends
36.21
Negative
35.77
Negative
30.51
Positive
Market Momentum
>-0.01
Positive
39.73
Neutral
69.13
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDS, the sentiment is Negative. The current price of 34.31 is below the 20-day moving average (MA) of 36.11, below the 50-day MA of 36.21, and above the 200-day MA of 30.51, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 39.73 is Neutral, neither overbought nor oversold. The STOCH value of 69.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TDS.
Telephone & Data Systems Risk Analysis
Telephone & Data Systems disclosed 30 risk factors in its most recent earnings report. Telephone & Data Systems reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Telephone & Data Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $5.76B | 22.66 | 7.13% | 5.23% | 2.53% | ― | |
75 Outperform | $5.04B | 11.45 | 6.76% | 2.62% | 8.78% | -21.85% | |
64 Neutral | $4.22B | 4.28 | 23.27% | ― | -26.74% | ― | |
64 Neutral | $5.36B | ― | -0.85% | ― | -3.48% | -169.60% | |
59 Neutral | $13.76B | 7.70 | -1.87% | 3.86% | 2.21% | -37.55% | |
58 Neutral | $3.68B | ― | -0.54% | 0.47% | -3.80% | 83.27% | |
48 Neutral | $3.88B | ― | -78.94% | ― | -7.86% | 97.11% |
* Communication Services Sector Average
Performance Comparison
TDS
Telephone & Data Systems
34.31
18.70
119.80%
LUMN
Lumen Technologies
3.78
2.46
186.36%
TEO
Telecom Argentina
9.18
0.62
7.24%
TKC
Turkcell Iletisim
5.87
-0.34
-5.48%
USM
United States Cellular
63.07
26.96
74.66%
TIGO
Millicom International Cellular SA
33.47
12.94
63.03%
Telephone & Data Systems Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: -8.85%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were significant achievements in financial structuring and fiber expansion, challenges in subscriber retention and competitive market pressures were evident. The anticipation of the T-Mobile transaction and future dividend declarations add positive momentum, but current operational challenges and revenue declines offset some of these potential benefits.Q1-2025 Updates
Positive Updates
Successful Financing and Transaction Preparation
TDS and UScellular extended near-term bank maturities and amended revolvers to ensure financial flexibility ahead of the expected mid-2025 closing of the transaction with T-Mobile.
Increased Third-Party Tower Revenue
Third-party tower revenue increased by 6% due to new colocations and escalators on renewed leases, indicating strong performance in the Tower business segment.
Strong Free Cash Flow Generation
The company generated $79 million of free cash flow in Q1 2025, an $18 million increase over the same quarter last year, driven by reduced capital expenditures and stable operating expenses.
Aggressive Fiber Expansion
TDS expanded its fiber footprint by over 30% in the last three years and is on track to achieve its goal of 150,000 fiber addresses in 2025, with significant construction activities planned.
Introduction of Transformation Cost Savings Program
TDS Telecom identified $100 million in annual cost savings expected by year-end 2028, with some savings anticipated by the end of 2025.
Negative Updates
Negative Net Adds in Handset Customers
Despite improvements in promotional offers, UScellular still experienced negative net adds in handset customers, putting pressure on service revenues.
Decline in Operating Revenues
Total operating revenues for TDS Telecom were down 3% year-over-year due to divestitures and declines in commercial and wholesale revenue, along with decreases in residential video and voice connections.
Challenges from Competitive Market
The market remains highly competitive with aggressive promotions from competitors, including multiyear price locks and contract buyouts, impacting UScellular's ability to sustain high promotional expenses.
Non-Receipt of Expected Transaction Proceeds
UScellular does not expect to receive most of the $100 million contingent on achieving certain performance metrics prior to the T-Mobile transaction close, potentially reducing the purchase price closer to $4.3 billion.
Company Guidance
During the TDS and UScellular First Quarter 2025 Operating Results Conference Call, the company provided guidance on several metrics. The call highlighted expectations for a mid-2025 closing of the transaction with T-Mobile, which is anticipated to generate substantial proceeds. This includes a special dividend to shareholders, contingent on UScellular Board approval, and the use of proceeds to repay TDS' bank debt of approximately $1.2 billion. The guidance also covered financial flexibility initiatives, such as extending near-term bank maturities and amending revolvers. Despite the challenges of a promotional market, UScellular delivered $79 million in free cash flow in Q1 2025, an $18 million increase year-over-year. The company expects capital expenditures to decline in 2025 as 5G coverage builds are largely completed. TDS Telecom shared its goal to deliver 150,000 new fiber addresses in 2025, with total service addresses up 6% year-over-year. Additionally, TDS Telecom has identified $100 million in annual cost savings by 2028, expected to mitigate increased costs from expanding its fiber footprint. The company remains committed to transforming its operations and achieving long-term financial success.Telephone & Data Systems Corporate Events
Executive/Board Changes
TDS Updates Bylaws Following Leadership Changes
Neutral
Mar 14, 2025
On March 13, 2025, Telephone & Data Systems (TDS) implemented amendments to its Bylaws, following the recent appointments of Walter C. D. Carlson as President and CEO, LeRoy T. Carlson, Jr. as Vice Chair, and Christopher D. O’Leary as Lead Independent Director. These amendments outline the roles and responsibilities of the Vice Chair, including the ability to act in the absence or inability of the Chair or President, and specify that the Vice Chair is an officer position under the Chair’s supervision. The amendments also allow the Lead Independent Director to chair Board meetings if the Chair, President, or Vice Chair are unavailable.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.