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Gauging Changes to Sprint’s Valuation after Its Q2 2018 Results

Ambrish Shah - Author
By

Nov. 8 2018, Updated 9:00 a.m. ET

Sprint’s scale

In this article, we’ll look at Sprint’s (S) valuation following its results for the second quarter fiscal 2018. As of November 5, Sprint’s market cap is $25.6 billion, making it the fourth-largest US mobile carrier in terms of market cap.

In comparison, T-Mobile’s (TMUS) market cap is $58.5 billion, Verizon’s (VZ) market cap is $236.4 billion, and AT&T’s (T) market cap is $222.9 billion.

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Short interest ratio

On November 5, Sprint stock’s short interest as a percentage of its float (or short interest ratio) was ~16%. A short interest ratio of more than 40% signifies that traders and investors foresee a correction in a stock’s price.

Sprint’s valuation metrics

On November 5, Sprint had a trailing-12-month EV-to-EBITDA (enterprise value-to-EBITDA) multiple of ~4.8x compared to the multiples of its closest peers. T-Mobile, AT&T, and Verizon had trailing-12-month EV-to-EBITDA multiples of ~7.7x, ~7.5x, and ~7.5x, respectively.

Sprint expects its EV-to-EBITDA for fiscal 2018, which will end in March 2019, to be ~4.6x. It expects its EV-to-EBITDA multiple to be ~4.4x in fiscal 2019.

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