3 models fit Telephone and Data Systems Inc. Common Shares and they disagree: 1 of 3 land within 15% of the average.
Two or more of our models back this value.
Near fair value(i)
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, and EV/EBITDA comparison.
ACCE opinionTelephone and Data Systems Inc. Common Shares (TDS)
Fair value (3 models)
$34.14
ACCE price target
$36.00
Rating
Fairly valued
Horizon
12 months
Fair value published on 19 Oct 2026, 17:05 CEST; previously $37.60 since 15 Oct 2026, 00:00 CEST.
ACCE price target published on 11 Oct 2026, 00:00 CEST.
Rating published on 19 Oct 2026, 17:05 CEST.
Price used: $35.33 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, P/E comparison, and EV/EBITDA comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
3.5% above
-3.4% to fair value
ACCE score
46
out of 100
Analysts
67% buy
3 covering
P/E
8.7x
forward 39.1x
1-year return
-8.2%
Dividend yield
0.48%
Telephone and Data Systems Inc. Common Shares in four questions
Plain answers, details below
Free accounts get 5 full stock pages a month, including the four answers.
Overview
ACCE thesis
Telephone and Data Systems runs two wireless and wireline businesses: US Cellular, a regional wireless carrier, and TDS Telecom, a fiber and copper provider serving rural and suburban households. Its moat is local: US Cellular holds spectrum and tower density in mid-sized markets where national carriers have less reach, and TDS Telecom's fiber footprint is being built out in areas with little competition. Fiber passings and postpaid account growth are the near-term drivers to watch, since they determine whether the capital spending now depressing earnings converts into revenue. The stock looks inexpensive on trailing earnings at 8.5 times, but the forward multiple of 39.1 times and a negative 6.6% operating margin say the reported profit base is thin and heavily shaped by depreciation and build costs. Revenue growth of 3.6% and a 59.4% gross margin show an underlying business still producing cash, so the question for the deeper work is whether that cash covers the buildout and what the fiber payback looks like.
⚠ Investor warnings · 4 flagsAI-assisted·How I use AI
high
Revenue shrinking over five years
Five-year revenue CAGR is -25.1% and quarter-on-quarter revenue fell 6.4%, even though year-on-year revenue grew 3.6%. The long-run trend is contraction.
moderate
Operating loss despite net profit
Operating margin is -6.6% while net margin is +33.2%. The bottom line is being carried by non-operating items, so headline earnings overstate the core business.
moderate
Earnings declining year on year
Earnings are down 11.8% year on year. The 8.3 trailing P/E looks cheap, but it rests on earnings that are falling.
moderate
Short interest elevated
Short interest stands at 6.5% of shares outstanding, meaning a meaningful group of investors is betting on further decline.
AI research notes
AI-assisted·How I use AIWritten Oct 21, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Trailing earnings are strong, with a net margin of 33.2% and a latest earnings surprise of +1766.7%.
Free cash flow of $195M over the last twelve months gives the stock a 5.1% free cash flow yield.
Why it could disappoint
Forward earnings look expensive at 39.1x against a sector median of 16.7x, so the rebound in profit is already priced in.
Revenue growth of +3.6% year over year sits far below the 5-year average of -25.1% a year, so the trend is unclear.
Return on invested capital of -0.1% shows the business is not currently earning a return on the capital it uses.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 6, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
Walk me through this stock
Plain-English pros, cons, and what to watch. Pro feature.
PRO
Ask ACCE
Valuation
INVESTOR
Where TDS's valuation models land
Price
$35.33
Model fair value
$34.14
Model range
$10.71 to $61.68
Fair value $34.14
Price $35.33
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
EV/EBITDA comparison
P/E comparison
Create a free account: 5 full stock pages a month, no card.
See what each model says, the assumptions behind it, the bad, normal and good cases, and why the fair value changed.
Quality
INVESTOR
Quality and conviction INVESTOR FEATURE
The full quality picture: a reason under every score, how the scores moved, and the conviction breakdown.
+A plain reason under every score
+Conviction breakdown and growth / value / quality / momentum scores