Analyzing Sprint’s Valuation Multiples in December
As of December 5, 2017, Sprint’s (S) market capitalization was ~$23 billion, making it the fourth-largest US wireless behemoth in terms of market capitalization. In comparison, AT&T (T) had a market capitalization of $224.4 billion. Verizon’s (VZ) market capitalization was $207.7 billion, and T-Mobile’s (TMUS) was $50.7 billion.
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In the December 5, 2017, trading session, Sprint stock closed at $5.74, which was close to its lower Bollinger Band of $5.78. The value denotes that the stock is oversold, which tends to be a “buy” signal for some investors.
Short interest ratio
As of December 5, 2017, Sprint’s short interest as a percentage of its shares outstanding (or short interest ratio) was ~5.3%. Normally, a stock’s short interest ratio of more than 40% means that investors and traders anticipate a fall in the stock.
Sprint’s valuation metrics
As of December 5, 2017, Sprint was trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of ~4.7x. In comparison, T-Mobile, Verizon, and AT&T had forward EV-to-EBITDA multiples of ~6.8x, ~7.0x, and ~6.5x, respectively.
As of December 5, 2017, Sprint was trading at a forward PE (price-to-earnings) multiple of ~196.2x. T-Mobile, Verizon, and AT&T had forward PE multiples of ~22.5x, ~13.2x, and ~12.5x, respectively.