In this part of the series, we’ll look at some value-centric measures for Sprint (S) among the major companies in the US wireless space. Let’s start with the size of the top four US wireless carriers: Verizon Communications (VZ), AT&T (T), T-Mobile (TMUS), and Sprint.
As of December 6, 2016, AT&T was the largest US telecom player, while Verizon was the second-largest, and T-Mobile was the third-largest player by market capitalization. Sprint’s market capitalization remained lower than T-Mobile’s.
Sprint’s valuation multiples
EV (enterprise value) multiples help investors to understand the value of a company via its sources of capital from the shareholders’ point of view. It is a forward multiple based on expected values after one year.
As of December 6, 2016, Sprint’s forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) metric was ~5.93x which was lower than T-Mobile’s ~6.50x. Meanwhile, integrated US telecom giants Verizon and AT&T had similar EV-to-EBITDA metrics of ~6.66x and ~6.59x, respectively.
In the next and final part of this series, we’ll look at analysts’ recommendations for Sprint stock.