Telephone and Data Systems Inc. (TDS) Drops 2.50% After Earnings, Beats EPS and Revenue Below Consensus

2026-02-20 · Stocks · QuoteReporter

Post Earning Analysis

Telephone and Data Systems Inc. (TDS) Drops 2.50% After Earnings, Beats EPS and Revenue Below Consensus

Telephone & Data Systems, Inc., founded in 1968 by LeRoy T. Carlson and headquartered in Chicago, Illinois, is a diverse telecommunications provider. The company offers a range of services including wireless and wireline telecommunications, broadband, video, and voice connections. It operates through several segments: UScellular Wireless, UScellular Towers, TDS Telecom, and a corporate segment that includes Suttle-Straus, Inc.

The current price of the asset is $43.85, reflecting a significant drop of 2.5% today. This price is closer to the week’s low of $43.73 and substantially below the week’s high of $47.8, indicating a recent downward trend. The asset’s price is also notably lower than the 52-week and YTD high of $47.8, by approximately 8.25%, suggesting a pullback from recent peaks.

In terms of moving averages, the asset is currently trading below the 20-day moving average (MA20) by 3.43%, but above both the 50-day (MA50) and 200-day (MA200) moving averages by 2.78% and 13.09%, respectively. This configuration indicates a medium-term bullish trend despite short-term volatility.

The Relative Strength Index (RSI) at 45.02 suggests the asset is neither overbought nor oversold, hovering near the neutral zone. The positive MACD value of 0.75 supports the presence of upward momentum, although this might be weakening given the recent price drop.

Overall, the asset shows mixed signals with recent price declines and short-term bearishness contrasted by a generally positive performance over longer periods. Investors might exercise caution due to the current volatility and recent downward movement.

Telephone and Data Systems, Inc. (TDS) announced its Q4 2025 financial results, revealing significant strategic changes and financial improvements. During the quarter, TDS completed the sale of its wireless business and launched a new tower company, Array, while intensifying its focus on expanding its fiber broadband services. The company repurchased 1,765,863 common shares for $67.4 million and repaid $150 million in debt to the Export Development Canada.

Financially, TDS reported a 12% increase in Q4 operating revenues, rising from $295.3 million in Q4 2024 to $330.7 million in Q4 2025. Net income saw a substantial increase to $37.2 million in Q4 2025, up from $1.0 million in the prior year’s quarter. Diluted EPS for Q4 2025 was $0.32, compared to $0.01 in Q4 2024.

For the full year, TDS’s operating revenues were $1,228.2 million in 2025, down 5% from $1,297.0 million in 2024. However, net income improved significantly to $48.2 million in 2025 from a loss of $141.4 million in 2024, with diluted EPS recovering to $0.39 from a loss of $1.24 per share in 2024.

Looking ahead to 2026, TDS Telecom and Array are expected to generate operating revenues between $1,015 million and $1,055 million, with adjusted OIBDA estimated at $300 million to $340 million and capital expenditures projected between $550 million and $600 million. The company also noted improvements in residential fiber churn and revenue per connection.

Earnings Trend Table

Analyzing the EPS trends over the reported quarters reveals significant volatility in both estimated and reported EPS values, as well as the resulting surprise percentages. Starting from the most recent quarter in 2025, there was a notable positive surprise where the reported EPS of 0.07 greatly exceeded the estimate of -0.06, resulting in a -216.67% surprise. This represents a significant turnaround compared to the previous quarter in May 2025, where the reported EPS of -0.09 fell far below the estimate of 0.05, yielding a -285.57% surprise.

A pattern of inconsistency is evident, as the company alternated between underperforming and outperforming estimates significantly. For instance, in February 2025, the reported EPS of -0.10 was much better than the estimated -0.28, showing an improvement with a 64.41% surprise. However, this followed a drastic underperformance in November 2024, where the reported EPS of -0.73 was far below the estimate of -0.18, marking a -304.05% surprise.

Throughout the observed quarters, the company’s EPS has shown dramatic fluctuations, demonstrating both overperformance and underperformance relative to analyst expectations. This erratic pattern suggests potential challenges in earnings predictability and could imply underlying volatility in the company’s financial performance or external economic factors affecting its operations.

Dividend Payments Table

The dividend data from March 2024 to December 2025 indicates a notable consistency in the dividend payments, with a singular exception. Starting from March 2024, there was a significant dividend payment of $0.19. However, subsequent quarters showed a reduction, stabilizing at $0.04 per quarter from June 2024 onwards through the end of 2025.

This pattern suggests a possible restructuring or adjustment in the dividend policy after the first quarter of 2024. The reduction to a consistent $0.04 could reflect a strategic decision by the entity to reallocate resources or perhaps a response to a change in financial health or market conditions. The consistency of the $0.04 dividends post-adjustment indicates a new established level aimed at maintaining regular returns to shareholders while possibly prioritizing other financial obligations or investments. The initial higher payment might have been an anomaly or a strategic move to distribute excess cash reserves.

The four most recent rating changes for the unidentified security reflect a positive shift in market sentiment as evidenced by upgrades and resumed coverage by major financial firms.

1. On November 26, 2025, Citigroup resumed coverage on the security with a “Buy” rating and set a target price of $45. This resumption likely indicates renewed interest or a favorable outlook on the stock, possibly due to operational improvements or market conditions becoming more favorable.

2. Earlier, on November 7, 2024, Raymond James upgraded their rating from “Market Perform” to “Outperform,” with an increased target price of $51. This substantial upgrade suggests a significant change in the firm’s valuation model or expectations of enhanced performance relative to the market.

3. On August 8, 2023, JP Morgan upgraded the security from “Neutral” to “Overweight” and set a target price of $38. This change indicates a more bullish stance on the stock, implying that JP Morgan analysts expect it to outperform its sector or the broader market.

4. Just a few days prior, on August 4, 2023, Citigroup also upgraded the security from “Neutral” to “Buy.” Although no specific target price was provided at this time, the upgrade itself points to a positive reassessment of the stock’s prospects, potentially driven by improved company fundamentals or market conditions.

These upgrades and resumed coverage collectively suggest a growing confidence in the security’s performance potential, making it a candidate for investor consideration based on the analysis from these reputable financial institutions.

The current price of the stock is $43.85. Analyzing the target prices provided by various financial institutions reveals a mixed but generally positive outlook. Citigroup recently resumed coverage with a target price of $45, suggesting a modest upside potential. Raymond James is more bullish, upgrading the stock from Market Perform to Outperform with a target price of $51, indicating a potential increase of approximately 16.3% from the current price. Earlier, JP Morgan upgraded their rating from Neutral to Overweight, setting a target at $38, which the current price has already surpassed.

This data suggests that analysts are generally optimistic about the stock’s future performance, with recent upgrades indicating improved prospects. However, the range of target prices also reflects some uncertainty or differing views on the stock’s valuation and potential growth. No specific details on EPS (Earnings Per Share) trends or dividend policies were provided, which are also critical factors in assessing the overall financial health and attractiveness of the stock.

Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice, investment recommendations, or trading guidance. Markets involve risk, and past performance is not indicative of future results. You should always conduct your own research and consult with a qualified financial advisor before making any investment decisions. By acting, you accept full responsibility for your choices.