After Hitting an All-Time High, Is T-Mobile US Stock Still a Good Buy?

T-Mobile US (NASDAQ: TMUS) is a top telecom stock that's been on a tear. As of Tuesday's close, it was up 53% since the start of the year. It hit a new all-time high recently as it continues to post industry-leading numbers, winning over growth investors in the process.

The big question investors may be asking now, however, is whether it's too late to invest in the stock, given its impressive gains and rising valuation. Let's take a closer look at how T-Mobile has been doing and whether it's still a good buy today.

T-Mobile continues to hit record numbers

What has made T-Mobile a popular telecom stock to own in recent years is its pursuit of growth and differentiating itself from its peers, referring to itself as the "un-carrier" brand. While other telecom companies focus on stability and dividends, T-Mobile only began paying a dividend last year; the company has mainly been focused on expanding.

When it reported its third-quarter earnings in October, it continued to display its increasing popularity with consumers, reporting the lowest quarterly postpaid phone churn rate in its history at just 0.86%. It reached a milestone of 6 million broadband customers. And it reported multiple metrics that were the best in the industry, including service revenue growth of 5% and a 43% increase in net income compared to the previous year.

On top of all this, there's even more reason to be bullish on the company's future as it looks to acquire United States Cellular. Assuming the deal goes through, T-Mobile will gain millions of new customers, unlocking even more growth opportunities.

Comparing T-Mobile to rival telecom stocks

T-Mobile has been a red-hot stock to own this year, and investors who want to buy its shares will have to pay a bit of a premium for it when compared to its peers. Currently, it's trading at a forward price-to-earnings (P/E) multiple of 22, which is based on average analyst expectations. By comparison, AT&T trades at just 10 times its estimated future profits, while Verizon Communications is only trading at a forward P/E of 9.

But over the years, T-Mobile has generated better growth numbers, and that continues to be evident with its latest earnings numbers.

TMUS Operating Revenue (Quarterly YoY Growth) data by YCharts

T-Mobile's valuation also isn't terribly high when you consider the average stock in the S&P 500 (SNPINDEX: ^GSPC) trades at a forward P/E of 23.

Is T-Mobile stock still a good buy right now?

T-Mobile's stock does trade at a premium, but it may be warranted, given the company's strong results. Investors are often willing to pay more for a business that's doing the right things and outperforming its peers. Although T-Mobile isn't necessarily a cheap stock to own right now, it looks fairly valued and can potentially still generate great returns if you're willing to hang on for the long term.

Between its strong growth and low churn, the company has demonstrated it's doing an excellent job of not just winning over customers, but also keeping them. And now that it also pays a dividend, there may be less of a reason for investors to choose stocks such as Verizon or AT&T instead of T-Mobile. While you won't get as high a dividend yield with T-Mobile (it's only about 1.4% right now), it can make for one of the best all-around telecom stocks to buy right now.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.