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Select Earnings Metrics for Sprint and Its Peers

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Sprint among the top four wireless carriers in the US

In this part of the series, we’ll look at select metrics for Sprint (S) and some of its peers in the United States. The top four US wireless players are Verizon (VZ), AT&T (T), T-Mobile (TMUS), and Sprint. The wireline operations of integrated telecom (telecommunication) players Verizon and AT&T are significant.

Sprint’s wireline component is very small compared to its wireless services. Sprint generated ~$7.5 billion in revenue from its wireless segment during fiscal 2Q15 (calendar 3Q15). Meanwhile, the telecom company made ~$609 million in wireline revenue during the same quarter.

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Based on market capitalization, Sprint was the smallest player among the top four US wireless carriers as of November 23, 2015. T-Mobile’s market capitalization was much higher than Sprint’s. Meanwhile, AT&T was the largest player in this metric on the same date, with Verizon following.

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Trailing EBITDA multiples of Sprint and some peers

Now we’ll look at EBITDA (earnings before interest, tax, depreciation, and amortization) multiples of the top four US wireless players. Sprint had a trailing-12-month EV/EBITDA (enterprise value to EBITDA) of ~6.84x on November 23, 2015.

Trailing-12-month EV/EBITDA for T-Mobile on November 23 was ~8.17x. AT&T and Verizon had trailing-12-month EV/EBITDAs of ~9.74x and ~7.86x, respectively, on the same date.

Analyst recommendations for Sprint

Now let’s look at Wall Street analysts’ recommendations for Sprint’s stock. During the last month, there were two “strong buy” recommendations, two “buy” recommendations, 18 “hold” recommendations, three “underperform” recommendations, and four “sell” recommendations on the stock.

Instead of directly investing in Sprint, you may consider taking diversified exposure to the telecom company by investing in the Vanguard Telecommunication Services ETF (VOX).

VOX had ~1.8% of its holdings in Sprint at the end of September 2015.

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