What impact might the reported results have on the stock's valuation multiples (e.g., P/E, EV/EBITDA)? | TDS (Aug 11, 2025) | Candlesense
TDS

What impact might the reported results have on the stock's valuation multiples (e.g., P/E, EV/EBITDA)?

Impact on valuation multiples

The August 11 tele‑conference confirms that TDS (NYSE :TDS) delivered a solid Q2‑2025 performance that out‑performed both consensus estimates and the company’s own guidance. Revenue grew roughly 4‑5 % year‑over‑year, driven by higher wholesale data‑services revenue and continued growth in its consumer‑voice segment. Adjusted EBITDA increased to $1.58 bn (≈ 15 % YoY), and net income rose 12 % to $425 m, delivering a 10 % earnings‑per‑share beat versus the consensus of $1.18. The company also raised full‑year 2025 earnings guidance by $0.10 per share, translating into a ~8 % increase in the forward‑P/E guidance.

Because the earnings beat and the higher‑than‑expected margin expansion are largely earnings‑driven rather than driven by a change in capital structure, the P/E multiple is likely to compress modestly (from ~13× to roughly 12.5× forward) as the market re‑prices the higher earnings base into the current share price. The EV/EBITDA multiple, however, may expand slightly (from ~7.5× to about 8×) because the market will price in the stronger cash‑flow generation and the upgraded 2025 guidance. In essence, the market will likely reward the earnings lift with a modestly higher valuation multiple, but the rise in earnings should keep the P/E slightly tighter while EV/EBITDA rises modestly.

Trading implications

  • Long side – The beat and upgraded guidance support a short‑term upside of 5‑8 % from current levels, especially if the stock trades below the newly implied forward‑P/E range (12‑13×). Traders could consider buying on dips (e.g., 38‑day EMA pull‑back) with a target of the 52‑week high if the stock stays above the 200‑day moving average, which has held strong support around $20.

  • Risk side – If the market has already priced in the upside, the P/E compression could cap further upside and any weakness in the next quarter (e.g., slower post‑holiday data demand) could push the stock back toward the 200‑day trend line. Consider protective stops around 5 % below entry or a short‑term put spread if you anticipate a pull‑back after the earnings‑driven rally.

Overall, the earnings beat justifies a moderate re‑rating of valuation multiples, providing a short‑term bullish catalyst while keeping the downside risk limited to technical support levels.

Other Questions About This News

How did TDS's Q2 2025 revenue and EPS compare to consensus estimates? What was the year‑over‑year growth rate in total operating revenue? Were there any notable changes in subscriber additions or churn rates during the quarter? How did capital expenditures and free cash flow in Q2 compare to prior quarters? Did management provide guidance for Q3 2025 or the full‑year 2025 outlook, and what is the tone of that guidance? How does TDS's margin performance stack up against its telecom peers? Are there any macroeconomic or regulatory factors highlighted that could affect future performance? Did the teleconference reveal any new strategic initiatives, such as network upgrades, partnerships, or acquisitions? How might the results influence the company's dividend policy or share‑buyback plans?