Which Is the Top Telecom Stock in Q1?

For the big three players in the United States telecom sector, Q1 earnings are in the books. Verizon Communications NYSE: VZ, T-Mobile NASDAQ: TMUS, and AT&T NYSE: T are by far the most prominent players in this industry, and they compete fiercely. This competition manifests through two main verticals: wireless phone coverage and home internet.

Within the wireless segment, the key metric is net postpaid wireless subscriber additions or losses—a measure of how many recurring mobile phone customers a company gains or loses. Since mobile subscriptions are the core revenue driver for these firms and tend to have low churn, this figure provides a reliable indicator of performance. As such, net postpaid additions are widely considered the most important benchmark for evaluating wireless carriers.

So, which of the Big Three won in Q1 when looking at their earnings results? Unless otherwise indicated, all information and metrics use data as of the April 29 close.

Verizon: Mixed Results Leave Shares Virtually Unchanged

First up is Verizon. It is the smallest player of the three by market capitalization but has the most revenue. When looking at wireless, the company lost 289,000 net postpaid wireless subscribers, nearly 100,000 more than Wall Street expected.

This big drop in customers came as a result of the firm increasing its prices recently. 

The company’s total wireless service revenue rose by 2.7%, which indicates that the price increases benefited its overall revenue.

The results for in-home internet were stronger. Verizon added 339,000 broadband customers, including 308,000 from fixed wireless—a radio-signal-based technology that competes with fiber.

This pushed broadband connections up nearly 14%.

The company beat analysts’ estimates on the top and bottom lines, but markets were not particularly impressed.

Driven by the disappointing wireless losses, the stock rose by less than 1% after earnings.

T-Mobile: High Expectations Leave the Stock Nowhere to Hide

Next up is the largest player of these three by market cap, T-Mobile. The story was somewhat reminiscent of Verizon’s: beating on the top and bottom lines, but failing to get rewarded. The reason? Lower-than-expected net postpaid wireless subscriber additions.

However, T-Mobile’s disappointment differs drastically from Verizon’s; it added 495,000 net postpaid wireless subscribers. The number of additions was around 10,000 lower than what Wall Street was looking for.

In broadband, which T-Mobile refers to as “High-Speed Internet,” the company added 424,000 net customers.

The company’s entire new customer additions came in at 1.3 million, a company record and the highest level in the industry.

The company even raised its full-year guidance on free cash flow. 

Despite all this, shares got crushed post-earnings, dropping over 11%.

Ultimately, T-Mobile couldn’t escape its already elevated valuation and Wall Street expectations of net postpaid wireless subscribers.

AT&T: Analysts Broadly Upgrade This Stock After Postpaid Win

Last up is AT&T, which delivered a standout performance in net postpaid wireless additions, reporting 324,000 new subscribers—nearly 70,000 more than Wall Street had anticipated. The results suggest that AT&T may have gained market share from Verizon, likely benefiting from its competitor’s recent price hikes.

In broadband, AT&T mostly focuses on fiber, but also has a growing fixed wireless business. In fiber, additions came in at 261,000 while fixed wireless, known as AT&T Internet Air, added 181,000.

The company lost 124,000 non-fiber customers. AT&T is working to transition customers away from copper (non-fiber) to fiber, meaning not all these broadband adds are from totally new customers. AT&T ultimately beat estimates on sales, but fell short on earnings.

Overall, shares gained less than 1%. However, Wall Street price target changes show a disconnect.

Among updated price targets tracked by MarketBeat post-earnings, analysts broadly raised their targets on AT&T, doing so by an average of 8%. For Verizon, price targets barely budged. T-Mobile saw just one price target increase of 5%.

Final Verdict

AT&T comes out on top in this round of telecom earnings, exceeding expectations in net postpaid additions and demonstrating growth in fiber. However, T-Mobile still leads in total customer growth, suggesting a potential buy-the-dip opportunity. Meanwhile, Verizon, seen by some as undervalued, could benefit significantly if it can regain wireless momentum.

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