In this article, we’ll look at some value-centric measures for Sprint (S) in comparison to the other major companies in the US wireless space. We’ll start with the size of the top four US wireless carriers: Verizon (VZ), AT&T (T), T-Mobile (TMUS), and Sprint.
As of May 17, 2017, AT&T was the largest US telecom player, Verizon was the second largest, while 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-based (enterprise value) multiples help investors understand the value of a company via its sources of capital from shareholders’ point of view. EV multiples are forward multiples based on expected values after a year.
As of May 17, 2017, Sprint’s forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) metric was ~5.35x, which was lower than T-Mobile’s at ~6.70x. Meanwhile, the integrated US telecom giants Verizon and AT&T had similar EV-to-EBITDA metrics of ~6.51x and ~6.55x, respectively.
In the next article of this series, we’ll look at analysts’ recommendations for Sprint stock.