Telephone and Data Systems, Inc. (TDS) Stock Analysis

Why this analysis is different

• A sector-relative MoonshotScore — five pillars (business quality, financial safety, valuation, growth durability, momentum) re-ranked nightly against the full universe of US-listed common stocks.
• An AI Council read across up to eight perspectives — value, macro, quantitative, and momentum lenses — that shows where they disagree instead of averaging the tension away.
• Figures come straight from FMP and Yahoo Finance filings data. The AI writes the narrative around the numbers — it never edits the numbers.

Telephone and Data Systems, Inc. (TDS) Media & Communications Profile

Telephone and Data Systems (TDS) delivers wireless and wireline communication solutions across the U.S., operating through UScellular and TDS Telecom. With a focus on IoT and broadband services, TDS caters to both consumer and business segments, holding a significant market share in its operating regions and facing competition from larger national providers.

What Is the Investment Thesis for TDS?

Telephone and Data Systems (TDS) presents a mixed investment thesis. The company's established presence in the telecommunications sector, particularly through its UScellular and TDS Telecom segments, provides a stable revenue base. The dividend yield of 22.40% may attract income-focused investors. Growth catalysts include expansion in IoT solutions and broadband services. Investors should monitor the company's ability to maintain its market share amid increasing competition and technological advancements. The company's beta of 0.32 indicates lower volatility compared to the market.

Based on FMP financials and quantitative analysis

TDS Key Highlights

Market Cap of $3.99B, reflecting its established position in the telecommunications sector.

• P/E ratio of 8.81, indicating a premium valuation compared to industry peers.
• Profit Margin of 5.3%, demonstrating profitability in a competitive market.
• Gross Margin of 36.3%, reflecting efficient cost management in service delivery.
• Dividend Yield of 22.40%, offering a substantial return to shareholders.

Who Are TDS's Competitors?

TDS is benchmarked below against 8 industry peers on price, market cap, and our AI MoonshotScore.

AI Score by Stock Expert AI · Price data: FMP / Yahoo Finance This table mixes two scoring engines — compare a number only with others carrying the same tag.

What Are TDS's Key Strengths?

Established presence in the telecommunications market.

• Diverse service offerings including wireless and wireline solutions.
• Strong focus on customer service and satisfaction.
• Integrated suite of IoT solutions.

What Are TDS's Weaknesses?

High P/E ratio compared to industry peers.

• Limited geographic reach compared to national providers.
• Exposure to intense competition.
• Dependence on regulatory approvals.

What Could Drive TDS Stock Higher?

Expansion of 5G network infrastructure to enhance wireless service capabilities.

• Development and deployment of new IoT solutions for business and government customers.
• Potential acquisitions of smaller regional players to expand market reach.
• Government initiatives and private investments driving broadband infrastructure development.

What Are the Key Risks for TDS?

Intense competition from larger national providers.

• Rapid technological advancements rendering existing infrastructure obsolete.
• Economic downturns affecting consumer spending on telecommunications services.
• Regulatory changes impacting the telecommunications industry.
• Maintaining market share in a dynamic and competitive landscape.

What Are the Growth Opportunities for TDS?

• Growth opportunity 1: Expansion in IoT Solutions: TDS has the opportunity to capitalize on the growing demand for IoT solutions. TDS can leverage its existing infrastructure and expertise to offer customized IoT solutions to businesses and government customers, focusing on areas such as smart water solutions, fleet management, and private cellular networks. This expansion can drive revenue growth and enhance TDS's competitive position.
• Growth opportunity 2: Broadband Infrastructure Development: With increasing demand for high-speed internet, TDS can focus on expanding its broadband infrastructure. Government initiatives and private investments are driving the deployment of broadband networks in underserved areas. TDS can leverage these opportunities to extend its reach and offer high-speed internet services to more customers. This expansion can attract new subscribers and increase revenue from existing customers.
• Growth opportunity 3: 5G Network Deployment: The deployment of 5G networks presents a significant growth opportunity for TDS. 5G technology offers faster speeds, lower latency, and increased capacity, enabling new applications and services. TDS can invest in upgrading its wireless infrastructure to support 5G and offer enhanced mobile broadband services to its customers. This can attract new subscribers and drive revenue growth in the wireless segment.
• Growth opportunity 4: Strategic Partnerships and Acquisitions: TDS can pursue strategic partnerships and acquisitions to expand its service offerings and geographic reach. Partnering with technology companies can enable TDS to offer innovative solutions and enhance its competitive position. Acquiring smaller regional players can expand TDS's customer base and market share. These strategic initiatives can accelerate growth and create synergies.
• Growth opportunity 5: Focus on Customer Experience: Enhancing customer experience is crucial for retaining existing customers and attracting new ones. TDS can invest in improving its customer service, simplifying its billing processes, and offering personalized services. By focusing on customer satisfaction, TDS can build brand loyalty and reduce churn. This can lead to increased revenue and improved profitability.

What Are TDS's Competitive Advantages?

• Established infrastructure in its operating regions.
• Strong brand recognition in its local markets.
• Long-standing relationships with customers.
• Integrated suite of wireless and wireline services.
• Expertise in providing customized IoT solutions.

What Does TDS Do?

Telephone and Data Systems, Inc. (TDS), founded in 1968 and headquartered in Chicago, Illinois, is a telecommunications company providing a comprehensive suite of communication services across the United States. The company operates through two primary segments: UScellular and TDS Telecom. UScellular focuses on delivering wireless solutions to consumers, businesses, and government entities, offering services such as connected Internet of Things (IoT) solutions, software applications for various operational needs, wireless priority services, and a range of devices including smartphones, tablets, and routers. TDS Telecom, on the other hand, provides wireline and cable connections, offering internet, all-home WI-FI services, TDS TV+, local and long-distance telephone service, VoIP, broadband, and hosted voice and video collaboration services. TDS sells its products through multiple channels, including retail sales, direct and indirect sales, third-party retailers, independent agents, ecommerce, and telesales. As of December 31, 2021, TDS served approximately 5 million wireless connections and 1.2 million wireline and cable connections, demonstrating its significant footprint in the telecommunications market.

What Products and Services Does TDS Offer?

• Provides wireless solutions to consumers and businesses.
• Offers connected Internet of Things (IoT) solutions.
• Develops software applications for monitor and control.
• Provides business automation and operations solutions.
• Offers fleet and asset management solutions.
• Provides smart water solutions.
• Offers private cellular networks.
• Provides internet connections and all-home WI-FI services.

How Does TDS Make Money?

• Generates revenue through wireless services subscriptions.
• Revenue from wireline and cable connections.
• Sales of smartphones, tablets, and other devices.
• Revenue from internet and broadband services.
• Offers value-added services like TDS TV+ and VoIP.

What Industry Does TDS Operate In?

Telephone and Data Systems operates within the telecommunications services industry, a sector characterized by rapid technological advancements and intense competition. The industry is experiencing growth in areas such as 5G, IoT, and cloud-based services. TDS competes with larger national providers and regional players, including LUMN: Lumen Technologies, Inc., TEO: Telecom Argentina S.A., TKC: Turkcell Iletisim Hizmetleri A.S., AD: Array Digital Infrastructure, Inc., and PHI: PLDT Inc. The company's success depends on its ability to innovate, expand its service offerings, and maintain customer loyalty in a dynamic market.

Who Are TDS's Key Customers?

• Individual consumers seeking wireless and internet services.
• Businesses requiring communication and IoT solutions.
• Government entities needing wireless priority services.
• Residential customers for wireline and cable services.
• Small and medium-sized businesses for hosted voice and video collaboration services.

Telephone and Data Systems, Inc. (TDS) Valuation Context

Valued at $3.99B, TDS is classified as a mid-cap stock. Relative to its peer group, TDS's quantitative score of 46/100 is below the peer average of 65/100.

TDS Revenue & Earnings Trend

In Q2 FY2026, TDS generated $309.3M in top-line revenue, marking a sequential decrease of 0.1%. The company recorded net income of $298.4M, with diluted EPS of $2.57. Revenue has contracted over three consecutive quarters, which investors in this mid-cap Communication Services stock should monitor closely. Across the four most recent quarters, TDS averaged $0.89 in diluted EPS.

Company Profile

Telephone and Data Systems, Inc. operates in the Telecommunications Services industry within the Communication Services sector. It is headquartered in Chicago, US. The company is led by CEO Walter Carlson. TDS has traded publicly since 1981.

Return on equity for Telephone and Data Systems, Inc. stands at 8.6%, a gauge of how efficiently it converts shareholder capital into profit. Return on assets is 5.0%, showing how much profit it generates from its asset base. TDS trades at a trailing price-to-earnings ratio of 8.81, below the Communication Services sector average of ~17.60x. Its free cash flow yield is -11.4%, a gauge of the cash the business throws off relative to its market value. A current ratio of 3.82 indicates the company holds enough short-term assets to cover its near-term obligations. Its earnings yield is 9.8%, the inverse of the P/E and a quick read on earnings relative to price.

Telephone and Data Systems, Inc.'s Piotroski F-Score is 6/9, a 9-point checklist of profitability, leverage and efficiency — a middling fundamental profile. Its Altman Z-Score of 1.87 places it in the grey zone, a middle ground that warrants monitoring.

Telephone and Data Systems, Inc. has beaten Wall Street's EPS estimate in 6 of its last 8 reported quarters — a consistent record of delivering on expectations. Reported results have landed about 352.8% above estimates on average.

Over the past six months, Telephone and Data Systems, Inc. insiders filed 30 SEC Form 4 transactions — 13 sales and 17 purchases. On net that is roughly 61K shares acquired (about $2.0M) — insiders putting money in tends to read as conviction.

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Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.

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