United States Cellular Corporation (NYSE:USM) reported its second-quarter earnings on July 29, 2025. The company announced a special dividend of $22.50 to $23.75 per share, which amounts to $1.95 to $2.08 billion in total cash value. The company also revealed details about a sale to T-Mobile, which will close on August 1st.

Valuation on Sum-Of-The-Parts

The transaction details posted by US Cellular were used to generate a sum-of-the-parts valuation. The breakdown includes:

- Special dividend: $22.50–23.75 per share
- Towers: Q1 EBITDA of $33 million, expected to run-rate at $132 million, valued at a multiple of 20× (based on AMT 22× and CCI 21×)
- Spectrum sale: $2.0 billion
- Retained spectrum: ~70% of holdings, 9.5 billion MHz-POPs, valued at $0.25 per MHz-POP (low-band comps)
- Net debt post-close: $2.2 billion

The shares outstanding are 85.0 million, leading to a price target of $69.41.

Upside from Monetization Opportunities

Following the sale, US Cellular becomes a spectrum holding company and a tower rental company. With the growing demand for data driven by 5G, there is potential for increased demand for infrastructure investment. T-Mobile will lease back roughly 2,600 of the 4,400 owned sites and has options on 600 more, locking in base cash flow for at least 12 years.

Downside Risks from Market Dynamics

US Cellular will be overreliant on T-Mobile for revenue, with potential risks if T-Mobile renegotiates or if there is high churn. Additionally, the value of remaining assets could decrease due to market dynamics, especially considering the rural spectrum and assets.

Verdict

With the T-Mobile deal closing soon, the relative value for US Cellular shareholders is largely locked in. Current pricing is considered fair at $71 per share, aligning with the sum-of-the-parts valuation of $69.41 per share. The article maintains a Hold rating on US Cellular, considering balanced upside and downside potentials.

United States Cellular Q2 Earnings Preview: Sale Value Priced In (NYSE:USM)

United States Cellular Corporation (NYSE:USM) reported Q2 earnings and announced a special dividend of $22.50–23.75 per share ($1.95–$2.08 billion total). The company sold its spectrum to T-Mobile, with the deal closing on August 1, 2025. The transaction was valued using a sum-of-the-parts approach, including tower rentals, spectrum sales, and retained assets. The shares are priced at $69.41, with a Hold rating due to balanced upside and downside risks.