Over the past few years, there’s been one clear winner in the U.S. consumer wireless industry: T-Mobile US Inc (NASDAQ:TMUS). T-Mobile stock has risen 450% in the last five years and 120% in the last three. In the entire space, TMUS stock stands alone.

Look at three-year returns, for instance. Sprint Corp (NYSE:S) has gained 31%. AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), and United States Cellular Corp (NYSE:USM) all have posted negative returns. (To be fair, T and VZ shareholders have made modest profits including dividends.)

The performance of TMUS stock in such a challenged sector truly is impressive. And it is a challenged sector.

I argued just last month that T stock is not the dividend stock too many investors believe it to be. I’m not impressed with VZ stock, either. And back in February, I even wrote that I’d avoid T-Mobile stock, which at the time traded just above $60.

With TMUS back at similar levels, I’m still not compelled to jump in. T-Mobile and CEO John Legere have done an outstanding job over the years. With Sprint’s takeover hopes apparently dashed, T-Mobile stock looks like the best pick in the sector.

But that is faint praise at this point because I still believe the sector is going to get worse and could take TMUS stock down with it.

T-Mobile Stock Is Best in Breed

From here, there’s little argument that TMUS stock is the best choice of the “big four” U.S. wireless operators. (Admittedly, T-Mobile stock doesn’t pay a dividend, which might change the calculus somewhat for income investors.) And one only need to look at the company’s Q3 results to see why.

Service revenue grew 7% year-over-year. This is the 14th consecutive quarter in which T-Mobile led the category in that figure. Total revenue rose 8%, which made T-Mobile #1 for 17 of the last 18 quarters. Adjusted EBITDA rose 5%, to a record. EPS rose 50%, to another record. Free cash flow rose 59% to, you guessed it, a record.

In a market that overall is posting very little growth, T-Mobile has taken share for years, gains that have continued through 2017. There’s a reason TMUS stock has so handily outperformed the rest of the space: Its business is outperforming the rest of the industry.

Meanwhile, from a valuation standpoint, T-Mobile stock isn’t necessarily expensive. It does trade at about 23x trailing net income, which is a decent multiple for what’s still a relatively low-growth company.

But the company is guiding for nearly 50% annual growth in free cash flow from 2016 to 2019, which would put the figure in the $4.5 billion range at the end of the period and suggest a cheap, roughly 11x P/FCF multiple two years out.

That seems like a good number. T-Mobile’s balance sheet has far less leverage than Sprint’s. Its growth is much better than that of AT&T and Verizon. And even with the Sprint deal gone, T-Mobile has options.

It’s planning to aggressively buy back stock; even majority owner Deutsche Telekom AG (ADR) (OTCMKTS:DTEGY) may add to its stake. A tie-up with Dish Network Corp (NASDAQ:DISH) or a cable operator like Comcast Corporation (NASDAQ:CMCSA) or Charter Communications, Inc. (NASDAQ:CHTR) still could be in play.

In the space, after yet another year of market share gains and margin improvements, T-Mobile stock looks far and away the best play. But it’s the “in the space” qualifier that creates a potential problem.

Can TMUS Stock Outrun the Industry?

The U.S. wireless space simply isn’t that healthy at the moment, and I’m not sure how, exactly, it’s supposed to get better. Price competition, led by Sprint and T-Mobile, is fierce.

Verizon swore up and down it would never offer an unlimited data plan, then it caved in February. The market looks saturated, creating what looks like a “circular firing squad” amidst the big four.

The end of the Sprint-T-Mobile merger isn’t just bad news from the standpoint of cost synergies and other specific benefits. The move from four competitors to three, in theory, would alleviate the “race to the bottom” in pricing.

The U.S. wireless space looks much like the airline sector did years ago: leveraged companies with high incremental margins slashing prices and killing margins in the process.

Now, to be fair, the airline industry has turned itself around, leading to an about-face from no less an investor than Warren Buffett. But it took decades not months and a series of mergers and bankruptcies to get there.

The U.S. wireless space still is closer to the beginning of that process than the end. With “bundling” the next step in price competition, margins are going to get worse before they get better. 5G may help, but it’s years out.

In the meantime, T-Mobile may be able to keep up its multiyear streak of taking users, but it may have to pay to do so as AT&T (maybe) has to fund its acquisition of Time Warner Inc (NYSE:TWX), and Verizon becomes increasingly desperate for any growth.

Forced to choose a stock in the space, I’d choose TMUS stock in a heartbeat. But most investors aren’t forced to choose, and I’d rather benefit from the industry’s problems as a consumer than deal with them as an investor.

As of this writing, Vince Martin has no positions in any securities mentioned.