T-Mobile (TMUS) has started to face increasing headwinds despite industry leading performance. Slowing subscriber growth, stretched valuations and elevated debt levels collectively form a compelling case for seeking bearish exposure. With TMUS’s recent underperformance, I’m laying out a bearish options strategy to capitalize on potential downside. Trade Timing The timing for initiating bearish exposure in TMUS is optimal, as the stock recently has underperformed both its sector and the overall market. Additionally, a recent rally to the bearish trendline, provides an optimal entry point for maximizing risk to reward for bearish exposure. This technical set-up, combined with deteriorating relative strength targets a downside objective of $215. Fundamentals TMUS trades at a substantial premium relative to its telecommunications peers, despite modestly superior growth metrics and comparable margins. Forward PE Ratio: 22.6x vs. Industry Average 10.0x Expected EPS Growth: 15.9% vs. Industry Average 5.6% Expected Revenue Growth: 5.2% vs. Industry Average 2.5% Net Margins: 14.4% vs. Industry Average 12.7% Bearish Thesis Elevated Debt Levels: TMUS maintains a substantially higher debt-to-equity ratio of 1.99x, heightening its vulnerability to economic downturns and rising interest rates. Slowing Subscriber Growth: Despite industry-leading performance, TMUS is experiencing slowing subscriber growth, which could dampen revenue growth. Options Trade To leverage TMUS’s downside risk with elevated options premiums, I’m selling an August 22, 2025 $235/$255 Call Vertical @ $8.01 Credit. This involves: Selling the Aug 22, 2025, $235 Call @ $10.58 Buying the Aug 22, 2025, $255 Call @ $2.57 Trade risk: Maximum Reward: $801 per contract if TMUS is below $235 at expiration. Maximum Risk: $1,199 per contract if TMUS is above $255 at expiration. Breakeven Point: $243.01 View this Trade with Updated Prices at OptionsPlay This strategy capitalizes on TMUS’s valuation risks, heightened debt, competitive pressures, and poor relative strength. With clearly defined risk and attractive reward potential, this call vertical offers a compelling means to gain bearish exposure to T-Mobile’s potential price correction. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
