One-glance verdict
Undervalued
$45.28 our estimate vs market $35.85
Wall Street consensus: $47.50 (4.9% higher than our fair-value estimate)
21% below our estimate, below the bear case
Fundamentals snapshot
Telephone and Data Systems, Inc.
TDS · NYQ · Communication Services · Telecom Services
Current price
$35.85
52-week range
$31.51 - $49.12
Market cap
$4.13B
Balance sheet
Healthy
-0.55x Concerning
Net cash $945.02M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 11.8% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Reward Dividend yield is 0.4% with 40-year payout history.
- Risk Operating margin compressed from 2.8% to -6.6% over 3 years.
What this company does
Telephone and Data Systems, Inc.
Telephone and Data Systems (TDS) sells essential communications like internet, TV, and phone services to homes and businesses, mainly in areas outside of major cities. The company makes its money from the monthly fees customers pay, which creates a steady stream of recurring revenue (predictable income that comes in at regular intervals, like a utility bill). This business model is built on providing necessary services that people consistently pay for each month.
How the company got here
Telephone and Data Systems (TDS) started in 1969 when founder LeRoy T. Carlson began buying up small, independent telephone companies, many in rural parts of Wisconsin. The company's goal was to bring modern technology and great customer service to these smaller communities. Over the years, TDS grew by acquiring more of these local phone companies across the country. A major turning point was the creation of its own mobile phone subsidiary, U.S. Cellular, in 1983, which grew to be one of the largest wireless carriers in the nation.
What it actually does
TDS is a telecommunications company that provides services you likely use every day, like high-speed internet, TV, and phone services for homes and businesses. It also owns and leases out the towers that make wireless communication possible for mobile carriers. Think of them as providing the essential connections that keep people and businesses online and in touch, especially in smaller cities and suburban and rural areas.
TDS Telecom
This is the company's original and largest business, making up the majority of its revenue (the money it brings in from sales). TDS Telecom sells high-speed internet, TV, and phone services directly to people in their homes and to businesses, primarily in suburban and rural communities. Customers pay a monthly bill for these services, much like you would for your own internet or cable TV. This segment is heavily focused on upgrading its network to fiber-optic cables, which provide much faster and more reliable internet speeds.
Array Digital Infrastructure
This part of the business owns and operates thousands of cell phone towers across the country. Instead of selling phone plans to individuals, Array makes money by leasing space on its towers to other wireless companies, like T-Mobile. Those companies then place their equipment on the towers to provide their mobile service to their own customers. This segment was formed from what was left of U.S. Cellular after its main wireless business was sold.
What management is betting on now
The company's main focus is on becoming a fiber-centric company, meaning they are investing heavily in upgrading their old copper-wire networks to super-fast fiber-optic internet. They are betting that providing high-speed internet, especially in underserved rural and suburban areas, will be a major source of future growth. This involves significant capital expenditures (spending on physical assets like cables and equipment) to build out their fiber network. At the same time, through its Array segment, the company is focused on leasing its valuable tower space to other wireless carriers as they build out their own 5G networks.
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 Q3
$103.00M
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
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
Revenue
$1.22B
Net income
$-66.00M
Diluted EPS
-0.73
Operating cash flow
$307.00M
Free cash flow
$103.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $45.28 vs current price $35.85
Wall Street consensus is the average analyst price target: $47.50 (4.9% higher than our fair-value estimate).
Our most-likely fair value is $45.28 a share — about 26.3% above today's price of $35.85, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $945.0M - more cash than debt. Interest coverage -0.6x.
Net debt
$-945.02M
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 $1.25B Interest coverage -0.55x This is the baseline the peer rows are being compared against.
Total debt $13.50B 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 $733.52M 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 11.8% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 8/10 years.
-
Dividend yield is 0.4% with 40-year payout history.
Risks
-
Operating margin compressed from 2.8% to -6.6% 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)
8.96x
Forward P/E
—
P/B
1.01x
P/S
3.28x
EV/EBITDA
13.92x
PEG ratio
7.79x
Profitability
How much profit each dollar creates
Gross margin
59.4%
Operating margin
-6.6%
Net margin
33.2%
ROE
11.8%
ROA
-0.2%
Health
Liquidity and balance-sheet strength
Debt / equity
0.23x
Current ratio
3.82x
Quick ratio
3.74x
Total debt
$1.25B
Total cash
$2.19B
Growth
How the business has been compounding
Revenue TTM
$-493.06M
Revenue 5Y CAGR
-30.7%
EPS TTM
4.00
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$105.92M
Free CF TTM
$199.36M
FCF margin
-40.4%
Dividend
Shareholder payout
Yield
0.4%
Payout ratio
4.0%
Last ex-div date
2026-09-15