Will Slower Growth, Economic Uncertainty bring T-Mobile Stock Down To $120?
Question: How would you react if you held T-Mobile stock (NASDAQ: TMUS) and its value fell by 25% or more in the upcoming months? Although this might seem extreme, such an occurrence has happened before and could repeat itself again. To be sure, T-Mobile stock has performed well this year, rising 15% year-to-date in 2025 and nearly 60% over the last 12 months. The gains have been driven by strong postpaid phone customer acquisitions, led by its 5G network, and synergies from the Sprint merger that boosted earnings. The company has also successfully expanded into the broadband market with its fixed wireless offering, using excess spectrum acquired from Sprint. However, the overall market is undergoing a significant sell-off, spurred by increasing concerns about a U.S. recession following tariffs imposed by President Donald Trump on major trading partners. While telecom stocks are typically seen as defensive plays, T-Mobile’s premium valuation and positioning as a growth stock could make it more vulnerable to a correction in the event of a market sell-off.
Here’s the point: The key takeaway is that during a downturn, T-Mobile stock might incur substantial losses. Data from 2020 indicates that TMUS stock lost more than 26% of its value in only a few quarters while also seeing a peak-to-trough decline of about 57% during the 2008 financial crisis, faring a tad worse than the S&P 500. This raises the question: Could the stock see a sell-off and reach as low as $120 if a similar situation were to unfold? Naturally, individual stocks are generally more volatile than diversified portfolios. Therefore, if you are looking for growth with reduced volatility, you might consider the High-Quality portfolio, which has outperformed the S&P 500 and generated returns of over 91% since its inception.
Economic uncertainty could also weigh on T-Mobile, which is quite dependent on consumer spending. President Donald Trump’s aggressive tariff measures -including a 20% tariff on Chinese imports and 25% on imports from Canada and Mexico, along with tighter immigration restrictions – have raised concerns that inflation might return. All of this suggests that the U.S. economy could encounter significant difficulties and even a recession – our analysis here on the macro picture. Last week, during an interview, the President did not rule out the possibility that new tariffs might trigger a recession.
When taking into account the heightened uncertainty from the Trump administration’s policies, these risks become especially critical. The ongoing Ukraine–Russia war and global trade tensions further obscure the economic outlook. Tariffs increase import costs, leading to higher prices, reduced disposable income, and weaker consumer spending. Although T-Mobile’s wireless services are essential and should hold up in a downturn, the rising cost of its plans could discourage customers from upgrading to higher-end offerings. This shift could impact T-Mobile’s growth and profitability going forward.
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How resilient is TMUS stock during a downturn?
TMUS stock has been more resilient than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• TMUS stock fell 12.1% from a high of $115.57 on 6 January 2022 to $101.62 on 23 January 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 3 February 2022
• Since then, the stock has increased to a high of $272.83 on 3 March 2025 and currently trades at around $255
Covid Pandemic (2020)
• TMUS stock fell 26.0% from a high of $100.49 on 19 February 2020 to $74.32 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 18 May 2020
Global Financial Crisis (2008)
• TMUS stock fell 57.5% from a high of $50.42 on 9 October 2007 to $21.42 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 24 October 2016
Premium Valuation
At its current price of about $255 per share, T-Mobile is trading at approximately 24x consensus 2025 earnings, which seems somewhat expensive compared to peers. For instance, AT&T trades at under 13x forward earnings, while Verizon trades at under 10x forward earnings. Although T-Mobile’s recent financial performance has been robust of late, markets tend to be short-sighted, projecting short-term successes into the long term. In T-Mobile’s case, the assumption is likely that the company will continue its strong record of subscriber additions and grow earnings at double-digit rates. However, there is a real possibility that subscriber growth may slow down as competition intensifies and as other carriers in the U.S. more deeply deploy their mid-band spectrum. The big cost cuts that T-Mobile saw after the winding down of the integration of its Sprint deal could also eventually ease, impacting earnings growth. Moreover, growing economic uncertainty in the U.S. could also hurt the stock.
Given this potential slowdown in growth and the broader economic uncertainties, ask yourself the question: do you intend to hold on to your T-Mobile stock now, or will you panic and sell if it begins dropping to $225, $200, or even lower? Holding onto a declining stock is never easy. Trefis collaborates with Empirical Asset Management—a Boston area wealth manager—whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio into its asset allocation framework to provide clients with better returns and less risk compared to the benchmark index—a less turbulent ride, as shown in HQ Portfolio performance metrics.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Total [2] |
| TMUS Return | -5% | 16% | 361% |
| S&P 500 Return | -5% | -4% | 152% |
| Trefis Reinforced Value Portfolio | -6% | -8% | 508% |
[1] Returns as of 3/16/2025
[2] Cumulative total returns since the end of 2016
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