T-Mobile US, Inc. TMUS recently announced that it has inked a definitive agreement to acquire Vistar Media, a prominent provider of technology solutions for digital-out-of-home (“DOOH”) advertisements. The transaction is valued at $600 million in cash pending regulatory approval and customary closing condition. The acquisition, which is set to complete in first-quarter 2025, is expected by modestly accretive to T-Mobile's EBITDA.
Headquartered in New York, Vistar Media has an operation across 30 countries and boasts a global network of more than 1.1 million digital screens. It works with more than 370 OOH (out-of-home) media owners and provides services to around 3000 brand partners. Its comprehensive solution suite includes demand-side platforms, supply-side platforms, ad servers and data-driven expertise which allow brands to gain more attention from potential customers
Will TMUS Stock Benefit From This Acquisition?
Post completion of the buyout, TMUS will gain access to Vistar’s industry-leading capabilities, including its robust technology solutions, intelligent marketplace and extensive DOOH network worldwide. DOOH’s advertising strategy offers a unique and dynamic way of advertising that allows the development of engaging ad content. It allows advertisers to update the content in real time, which is a huge advantage compared with traditional billboards. This is gaining significant popularity and according to eMarketer’s projection over one-third of total out-of-home ad spending will be spent on DOOH ads. Through this acquisition, T-Mobile’s aiming to capitalize on this emerging market trend.
By integrating Vistar’s comprehensive ad technology with its extensive customer insights and data, T-Mobile aims to significantly enhance the personalization of DOOH ads, empowering marketers and advertisers to efficiently reach target audience and boost their return on investments.
T-Mobile’s acquisition strategy has significantly strengthened its position in the wireless industry over the past few years. The company completed its acquisition of Sprint in 2020. The combined company’s network has 14 times more capacity than on a standalone basis, which enables it to leapfrog the competition in network capability and customer experience.
T-Mobile also inked a definitive agreement with United States Cellular Corporation to acquire substantially all of the latter’s wireless operations along with 30% of its spectrum assets across several spectrum bands. The transaction will enable T-Mobile to expand its fast-growing home broadband offerings.
However, intensifying competition in the saturated U.S. wireless market is weighing on TMUS’ margin. Amid this backdrop, the company’s effort to venture into the DOOH ad market underscores its strategy to diversify business operation and open up new avenues of revenue generation. This augurs well for long-term growth.
TMUS Stock’s Price Movement
Shares of T-Mobile have gained 31.3% in the past year compared with the industry’s growth of 19%.
Image Source: Zacks Investment Research
TMUS’ Zacks Rank & Stocks to Consider
T-Mobile currently carries a Zacks Rank #5 (Strong Sell).
Here are some better-ranked stocks that investors may consider.
Keysight Technologies, Inc. KEYS flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.
InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.
It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.
Ubiquiti Inc. UI sports a Zacks Rank #1 at present. In the last reported quarter, Ubiquiti delivered an earnings surprise of 20.9%. Its highly flexible global business model remains apt to adapt to the changing market dynamics to overcome challenges while maximizing growth.
The company’s effective management of its strong global network of more than 100 distributors and master resellers improved UI’s visibility for future demand and inventory management techniques.
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