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Analyzing the Top 5 Telecom Players Valuations for 2018

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Market capitalization

As of January 4, 2018, AT&T’s (T) market capitalization was ~$233.3 billion, making it the largest US wireless player in terms of market cap.

By comparison, Verizon Communications (VZ) had a market cap of ~$214.6 billion, while Sprint’s (S) market cap was ~$22.5 billion, and T-Mobile’s (TMUS) market cap was ~$52.4 billion. Frontier’s (FTR) market cap was ~$0.6 billion as of the same date.

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EV-to-EBITDA valuation

As of January 4, 2018, T-Mobile was trading at a forward EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple of ~6.9x. AT&T was trading at ~6.7x, and Sprint was trading at ~4.6x.

Verizon has the highest premium, trading at a forward EV-to-EBITDA multiple of ~7.1x. In the US wireline space, Frontier was trading at a forward EV-to-EBITDA multiple of ~5.1x as of the same date.

PE valuation

As of January 4, 2018, Verizon was trading at a forward PE (price-to-earnings) multiple of ~13.5x. AT&T was trading at ~12.9x, and T-Mobile was trading at ~22.1x.

Sprint has the highest premium, trading at a forward PE multiple of ~270.9x.

Short interest ratio

When a stock’s short interest ratio (or short interest as a percentage of float) is higher than 40%, it means that investors and traders anticipate a fall in the stock’s price. On January 4, 2018, Verizon stock’s short interest ratio was ~2.07%.

By comparison, peers AT&T and T-Mobile had short interest ratios of ~5.06% and ~4.06%, respectively, as of the same date, while Sprint’s short interest ratio was ~6.07%.

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