One-glance verdict
Undervalued
$59.92 our estimate vs market $32.60
Wall Street consensus: $47.50 (-20.7% lower than our fair-value estimate)
46% below our estimate, below the bear case
Fundamentals snapshot
Telephone and Data Systems, Inc.
TDS · NYQ · Communication Services · Telecom Services
Current price
$32.60
52-week range
$30.71 - $49.12
Market cap
$3.56B
Balance sheet
Healthy
-0.55x Concerning
Net cash $397.44M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 12.2% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Reward Dividend yield is 0.5% with 40-year payout history.
- Risk Operating margin compressed from 2.8% to -9.1% over 3 years.
What this company does
Telephone and Data Systems, Inc.
Telephone and Data Systems (TDS) is a company that provides internet, TV, and phone services, mainly through its TDS Telecom division. They make money by charging customers for these services, and their profitability, often measured by margins (the percent of each sales dollar left after paying for services and operations), is important for understanding how well they're doing. Their focus on expanding broadband in areas that need it is a key part of their business strategy.
How the company got here
Telephone and Data Systems, Inc. (TDS) started in 1969 with 10 small, rural telephone companies in Wisconsin. The founder, LeRoy T. Carlson, renamed it to reflect the growing importance of data in telecommunications. Over the years, TDS expanded by acquiring more telephone companies and diversifying into related businesses like printing and paging. A significant turning point was the creation of U.S. Cellular in 1983, which marked its entry into the wireless market. More recently, TDS has been undergoing a major strategic shift, including the sale of most of its U.S. Cellular operations and a focus on expanding its fiber-optic broadband services through TDS Telecom.
What it actually does
TDS is a telecommunications company that provides a variety of communication services to customers across the United States. It operates through different subsidiaries, offering services like high-speed internet, television, and phone lines to homes and businesses. The company also has a significant presence in wireless infrastructure, managing cell towers. TDS aims to connect people and businesses through its diverse range of communication solutions.
TDS Telecom
TDS Telecom is the primary business for Telephone and Data Systems, Inc., generating the majority of its revenue. This segment provides essential communication services such as high-speed broadband internet, television entertainment, and traditional phone services. It serves a wide range of customers, from individuals in small towns and rural areas to businesses, with a strong focus on expanding its fiber-optic network to deliver faster and more reliable connections. TDS Telecom is actively investing in upgrading its infrastructure to meet the growing demand for data and connectivity.
Array Digital Infrastructure
Array Digital Infrastructure, formerly known as U.S. Cellular's infrastructure arm, is a significant part of TDS's business, though it generates less revenue than TDS Telecom. Array's main role is owning and operating a large network of cell towers across the United States. These towers are leased to wireless carriers, like T-Mobile, which use them to provide their own mobile services. This segment is crucial for enabling the deployment of 5G and other wireless technologies, acting as a backbone for mobile communication.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-17.00M
FY2025 Q1
$57.00M
FY2025 Q2
$264.00M
FY2025 Q3
$-60.63M
FY2025 Q4
$-108.89M
FY2026 Q1
$-81.58M
FY2026 Q2
$-113.31M
FY2026 Q3
$-305.52M
Revenue
$306.69M
Net income
$45.86M
Diluted EPS
0.25
Operating cash flow
$-107.86M
Free cash flow
$-305.52M
Fetching…
Sources
Revenue
$309.28M
Net income
$298.37M
Diluted EPS
2.42
Operating cash flow
$55.57M
Free cash flow
$-113.31M
Fetching…
Sources
Revenue
$309.45M
Net income
$144.59M
Diluted EPS
1.09
Operating cash flow
$67.46M
Free cash flow
$-81.58M
Fetching…
Sources
Revenue
$-1.42B
Net income
$56.51M
Diluted EPS
0.33
Operating cash flow
$19.58M
Free cash flow
$-108.89M
Fetching…
Sources
Revenue
$308.52M
Net income
$-81.75M
Diluted EPS
-0.84
Operating cash flow
$-36.69M
Free cash flow
$-60.63M
Fetching…
Sources
Revenue
$1.19B
Net income
$12.00M
Diluted EPS
-0.05
Operating cash flow
$421.00M
Free cash flow
$264.00M
Fetching…
Sources
Revenue
$1.15B
Net income
$7.00M
Diluted EPS
-0.09
Operating cash flow
$186.00M
Free cash flow
$57.00M
Fetching…
Sources
Revenue
$1.24B
Net income
$6.00M
Diluted EPS
-0.09
Operating cash flow
$212.00M
Free cash flow
$-17.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $59.92 vs current price $32.60
Wall Street consensus is the average analyst price target: $47.50 (-20.7% lower than our fair-value estimate).
Our most-likely fair value is $59.92 a share — about 83.8% above today's price of $32.60, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $397.4M - more cash than debt. Interest coverage -0.6x.
Net debt
$-397.44M
Interest coverage
-0.55x
Telephone and Data Systems, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
TDS
BASELINE
Telephone and Data Systems, Inc.
Total debt $1.24B Interest coverage -0.55x This is the baseline the peer rows are being compared against.
Total debt $13.48B Interest coverage -0.14x Neither company has much profit cushion over interest right now.
Total debt $11.10B Interest coverage 0.80x This peer still has a real interest-payment cushion, while TDS does not.
Total debt $765.62M Interest coverage -0.87x Neither company has much profit cushion over interest right now.
What you should know
The case for and against TDS
3 Rewards
1 Risk
Rewards
-
Returns 12.2% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
-
Dividend yield is 0.5% with 40-year payout history.
Risks
-
Operating margin compressed from 2.8% to -9.1% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
8.27x
Forward P/E
—
P/B
0.91x
P/S
2.84x
EV/EBITDA
14.51x
PEG ratio
7.79x
Profitability
How much profit each dollar creates
Gross margin
59.1%
Operating margin
-9.1%
Net margin
43.4%
ROE
12.2%
ROA
-0.3%
Health
Liquidity and balance-sheet strength
Debt / equity
0.24x
Current ratio
4.01x
Quick ratio
3.89x
Total debt
$1.24B
Total cash
$1.64B
Growth
How the business has been compounding
Revenue TTM
$-494.89M
Revenue 5Y CAGR
-30.7%
EPS TTM
3.94
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$34.75M
Free CF TTM
$199.36M
FCF margin
-40.3%
Dividend
Shareholder payout
Yield
0.5%
Payout ratio
4.1%
Last ex-div date
2026-09-15