T-Mobile US Inc (NASDAQ:TMUS) continues firing on all cylinders. The company keeps putting in strong quarter after strong quarter, particular on the subscriber growth front. While the company doesn’t look particularly profitable yet, results are trending in the right direction.

Investors have taken note of the company’s success. TMUS stock has tripled since 2013, and it has reached fresh all-time highs this year.

A transformative merger with Sprint Corp (NYSE:S) could dramatically improve the company’s competitive position. And if that deal falls through, plenty of other bidders wait in the wings. However, T-Mobile investors better hope a deal comes through. There are real questions as to how viable the company would be if it can’t find a partner soon.

TMUS Stock Cons

Massive Debtload: Yes, I know, most utility type companies carry a lot of debt. However, T-Mobile amps up the leverage to another notch. Since 2012, TMUS’ debtload has surged from $14.9 billion then to $27.8 billion. That growth in the debt rate, 13% per year compounded, is equivalent to the company’s rate of revenue growth over the same period. Thus, while T-Mobile’s revenues are growing nicely, it isn’t managing to shrink its debtload at all as a proportion of sales.

The company’s operating leverage is extreme; it carries $34 per share in debt and earnings under $2 per share a year in earnings. Sure, on an EBITDA basis, stripping out depreciation, taxes and other costs, T-Mobile stock looks quite cheap. However, EBITDA alone struggles to pay interest to creditors. The company hasn’t produced positive free cash flow on a yearly basis since 2012, and has only done so four out of the last 15 years. That’s not a great track record.

Unenviable Market Position: T-Mobile finds itself in a difficult place strategically. It’s not large enough as a standalone entity to keep expanding as it has been doing. The company’s operating leverage is already greatly elevated. Where would the funds for a competitive 5G rollout come from? Even if the company can fund its needed growth plans, what’s left for shareholders? The lack of economy of scale makes it hard for TMUS stock to ever turn into the sort of safe high-quality big dividend stock that the big two telcos are today.

Now the investment community is abuzz with rumors that T-Mobile and Sprint will make a deal. The two combined would have the scale to compete with the top two. However, Sprint is also heavily indebted. It’s unclear that merging the two weakest players in a four-dog hunt would accomplish much.

The comparable analogy would be Sears Holding Corp (NASDAQ:SHLD) and Kmart merging to try to survive against the bigger big-box players. A similar outcome isn’t guaranteed, but don’t expect miracles either.

AT&T Merger: The United States’ telecommunications market has reached saturation. For a company purely focused on that market, little growth remains. The only real way to get bigger is by taking market share, rather than finding new customers altogether.

As a result, AT&T Inc. (NYSE:T) is making bold moves to keep its growth profile. The DIRECTV buy added a lot of girth, making AT&T the continent’s largest pay-TV provider. And the company has invested heavily in Mexico, trying to turn an assortment of low-performing brands there into a competitive rival to Carlos Slim’s behemoth America Movil SAB de CV (ADR) (NYSE:AMX).

The company’s latest move takes things up another notch. The merger between AT&T and Time Warner Inc (NYSE:TWX) would make the company a giant. In that environment, even a merged Sprint/T-Mobile might not be able to compete.

TMUS Stock Pros

Customer-Friendly Contracts: Of course, all bets are off if T-Mobile and Sprint do merge. However, at least for the moment, TMUS offers more attractive contract terms than its rivals.

The company’s “un-contract” provides many perks rarely seen elsewhere. The advertised price of the contract is the actual price, for example; no added fees or taxes. There’s a no price increase guarantee. The contract offers international roaming, unlimited music streaming, and no overages among other features.

Not surprisingly, the offering has succeeded with customers. In the fourth quarter, the T-Mobile added 2.1 million new net subscribers. Additionally, the churn rate fell to a record low. In an industry where many customers hate their carrier, TMUS stock is winning some points.

M&A Target: As the telecom industry is continuing its consolidation phase, T-Mobile, with its broad spectrum assets and powerful subscriber base, brings a lot to the table. However, its excessive debtload and lower profit margins make it hard to succeed as an independent entity. While the company looks dreadfully expensive on an earnings basis, an acquirer could probably generate far more value with its assets.

Thus, T-Mobile makes a lot of sense as part of a bigger platform. Even if the Sprint deal doesn’t materialize, TMUS is likely to hook up with somebody else. Dish Network Corp (NASDAQ:DISH) is a logical partner, there’d be spectrum synergies. If cable companies are serious about their efforts to integrate with wireless, then Comcast Corporation (NASDAQ:CMCSA) and Charter Communications, Inc. (NASDAQ:CHTR) could both bid as well.

Strong Technical Momentum: TMUS stock is performing very well technically. That’s in spite of weakness elsewhere. The stock market has struggled in March. The Trump rally appears to have run out of gas.

However, T-Mobile stock has continued moving higher nonetheless. Some of this is due to analyst chatter. Last Friday, FBR added to the positive vibes. That firm’s analyst suggested that the Trump administration will help trigger a wave of mergers in the media and telecom industries.

Given that TMUS stock’s outlook relies heavily on one or more such mergers occurring, this would be positive indeed. Regardless of the reason, T-Mobile stock is still powering higher. Friday marked a new closing high, and the stock is now in the process of breaking over its last resistance level before reaching uncharted territory.

In a weak market, it’s worth watching the stocks that can still rally.

Verdict on T-Mobile Stock

If you have a strong stomach and don’t mind volatility, TMUS stock could work. Even at all-time highs, there could still be considerable upside if T-Mobile makes a good deal, either with Sprint or a different suitor.

However, given its large debtload, low profitability and questionable competitive position as a standalone entity, plenty of questions linger. For me, I need a decent discount to buy a stock with this much uncertainty. I’d hold off on chasing it up here at its all-time high.

At the time of this writing, Ian Bezek held no positions in any of the aforementioned stocks. You can reach him on Twitter at @irbezek.