Telephone & Data Systems (TDS) AI Stock Analysis

• Market Cap: $3.75B
• Dividend Yield: 0.46%
• Average Volume (3M): 927.17K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.50
• Revenue Growth: -5.14%
• EPS Growth: 78.63%
• Country: US
• Employees: 7,900
• Sector: Communication Services
• Sector Strength: 86
• Industry: Telecommunications Services
• EPS (TTM): -0.09
• Shares Outstanding: 107,208,070
• 10 Day Avg. Volume: 729,294
• 30 Day Avg. Volume: 927,167
• PEG Ratio: 13.54
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.78
• Enterprise Value/Market Cap: 2.35
• Enterprise Value/Revenue: 0.44
• Enterprise Value/Gross Profit: 3.16
• Enterprise Value/Ebitda: 2.37
• 1Y Price Target: $50.00
• Price Target Upside: 40.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 53 Neutral
• Price Target: $35.00 ▼(-1.63%Downside)

TDS exhibits strong cash flow generation and strategic financial planning, as highlighted in the earnings call. However, the declining revenue and profitability challenges, high leverage, and valuation concerns weigh heavily on the overall score. The score reflects a need for strategic improvements to address these financial and operational challenges.

Telephone & Data Systems Business Overview & Revenue Model

Company Description

Telephone and Data Systems, Inc. (TDS) is a diversified telecommunications company based in the United States, operating primarily through its subsidiaries, U.S. Cellular and TDS Telecom. The company provides a range of communication services, including wireless, broadband, and voice services, catering to both consumer and business markets. TDS is committed to delivering reliable and high-quality connectivity solutions, with operations spanning rural, suburban, and urban areas.

How the Company Makes Money

TDS generates revenue primarily through its two main subsidiaries: U.S. Cellular and TDS Telecom. U.S. Cellular, as a wireless telecommunications provider, earns its income from providing mobile voice and data services, including postpaid and prepaid plans, as well as device sales. Additional revenue streams include roaming agreements with other carriers and fees for additional services such as insurance and device protection plans. TDS Telecom, on the other hand, contributes to the company's earnings by offering broadband, video, and voice services to residential and commercial customers. This includes revenue from internet subscriptions, traditional and IP-based voice services, and digital television offerings. The company also benefits from strategic partnerships and government funding programs aimed at expanding broadband access, particularly in underserved areas, which play a significant role in supporting its financial performance.

Telephone & Data Systems Financial Statement Overview

Summary

TDS faces declining revenues and profitability challenges, with a negative net profit margin and high leverage. Despite strong cash flows, the high debt-to-equity ratio poses a risk, and strategic improvements are needed to enhance profitability and manage leverage effectively.

Income Statement

The company's TTM revenue has declined by 2.18% compared to the previous annual period, indicating a challenge in maintaining growth. Gross profit margin for TTM stands at 57.56%, which is healthy, but the net profit margin is negative at -1.03% due to losses. EBIT and EBITDA margins also indicate pressures on operational profitability, with EBIT margin at 0.62% and EBITDA margin at 24.03%. Overall, the income statement reflects declining revenues and profitability issues.

Balance Sheet

The debt-to-equity ratio is relatively high at 1.00, indicating significant leverage, which could be a risk if revenues continue to decline. Return on equity (ROE) is negative at -0.98% due to the net loss, reflecting a challenge in generating returns for shareholders. The equity ratio stands at 37.50%, showing a moderate level of equity financing. The balance sheet suggests potential leverage risks amid declining profitability.

Cash Flow

Operating cash flow is strong, with a high ratio to net income, indicating good cash generation capabilities despite net losses. Free cash flow has improved significantly, increasing by 31.95% compared to the previous annual period. The free cash flow to net income ratio is positive, suggesting better cash management and cost control. Despite strong cash flows, the underlying profitability challenges remain a concern.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.86B	4.96B	5.16B	5.41B	5.33B	5.22B
	Gross Profit
2.79B	2.83B	2.83B	2.85B	2.86B	2.87B
	EBIT
30.00M	63.00M	-414.00M	328.00M	477.00M	476.00M
	EBITDA
1.17B	1.20B	682.00M	1.08B	1.18B	1.19B
	Net Income Common Stockholders
-50.00M	-28.00M	-500.00M	62.00M	156.00M	226.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
348.00M	364.00M	236.00M	360.00M	367.00M	1.43B
	Total Assets
13.54B	13.68B	13.92B	14.55B	13.49B	12.53B
	Total Debt
5.09B	5.10B	5.14B	4.80B	4.04B	4.50B
	Net Debt
4.75B	4.74B	4.91B	4.44B	3.67B	3.07B
	Total Liabilities
7.67B	7.80B	7.91B	7.93B	6.75B	6.92B
	Stockholders Equity
5.08B	5.09B	5.20B	5.85B	5.93B	4.80B
Cash Flow		Free Cash Flow
318.00M	241.00M	-199.00M	-620.00M	-48.00M	164.00M
	Operating Cash Flow
1.11B	1.15B	1.14B	1.16B	1.10B	1.53B
	Investing Cash Flow
-631.00M	-754.00M	-1.33B	-1.78B	-2.46B	-1.51B
	Financing Cash Flow
-383.00M	-277.00M	56.00M	613.00M	321.00M	957.00M

Telephone & Data Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.58
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDS, the sentiment is Positive. The current price of 35.58 is above the 20-day moving average (MA) of 34.38, above the 50-day MA of 35.45, and above the 200-day MA of 32.21, indicating a bullish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 55.33 is Neutral, neither overbought nor oversold. The STOCH value of 72.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TDS.

Telephone & Data Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKC	76 Outperform	$5.39B	13.17	6.74%	2.39%	14.09%	-11.43%
TIGO	71 Outperform	$6.28B	17.61	10.19%	4.84%	-1.52%	4874.58%
USM	64 Neutral	$5.34B	―	-0.84%	―	-3.48%	-169.60%
Sector *	61 Neutral	$14.60B	5.88	-4.32%	3.68%	2.75%	-30.55%
LUMN	56 Neutral	$4.04B	―	-78.94%	―	-7.86%	97.11%
TEO	55 Neutral	$4.29B	20.13	3.99%	―	-12.77%	40.80%
TDS	53 Neutral	$3.75B	―	-0.97%	0.46%	-5.14%	78.63%

Telephone & Data Systems Corporate Events

Telephone & Data Systems Elects Directors at Shareholder Meeting

At the Annual Meeting of Shareholders on May 22, 2025, Telephone & Data Systems announced the election of directors and the approval of key proposals. Eight directors were elected by holders of Series A Common Shares and four by holders of Common Shares. Additionally, the selection of PricewaterhouseCoopers LLP as independent accountants for 2025 was ratified, and the compensation of named executive officers was approved.

The most recent analyst rating on (TDS) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Telephone & Data Systems stock, see the TDS Stock Forecast page.

TDS Updates Bylaws Following Leadership Changes

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.