MeritValue

TELEPHONE & DATA SYSTEMS INC /DE/

TDSdata completeness 88%18 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

TELEPHONE & DATA SYSTEMS INC /DE/ earns about 1% on invested capital, below its ~9% cost of capital, but has diluted owners by 2% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $81.01 and $87.33 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$5.22B1$5.29B2$1.23B3$1.18B3$1.07B3
Net income$156M4$62M5−$500M6−$27.7M6−$6.24M6
Operating cash flow$1.1B7$1.16B8$1.14B9$1.15B9$589.9M9
Capital expenditure$1.13B10$1.16B11$643.1M12$365.4M12$390.5M12
Free cash flow (derived)−$28M7−$6M8$498.1M9$780.4M9$199.4M9
Total debt—————
Cash & equivalents$367M13$360M14$236M15$363.6M16$766M16
Diluted shares116.0M114.0M112.8M113.7M118.6M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$404.98
your share of equity
Profit it earned you last year
−$0.53
Free cash flow it threw off
$16.81
Debt you’d be carrying
—

10 shares is a claim on $404.98 of net worth that earned you −$0.53 and generated $16.81 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
1% avg · 5y
FY21 7%FY22 3%FY23 -8%FY24 0%FY25 5%

It earned about 1% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+2% shares · 5y

Share count is up 2% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $81.01 and $87.33 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$87.33
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$498.1M
DCF · Growth Exit 5Y
$81.01
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$498.1M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $81.01
The three cases
Bear0.0%$66.48
Base5.0%$81.01
Bull10.0%$98.4

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001051512-24-000010 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001051512-25-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001051512-26-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001051512-24-000010 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001051512-25-000011 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001051512-26-000011 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001051512-24-000010 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001051512-25-000011 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001051512-26-000011 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001051512-24-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001051512-25-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001051512-26-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001051512-23-000006 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001051512-24-000010 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001051512-25-000011 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001051512-26-000011 (CashAndCashEquivalentsAtCarryingValue)