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Analyzing Sprint’s Valuation in March

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Sprint’s scale

As of March 15, Sprint’s (S) market capitalization was $26.1 billion. Sprint is the fourth-largest US wireless carrier in terms of market capitalization. AT&T (T) had a market capitalization of $223.4 billion. T-Mobile’s (TMUS) market capitalization was $62.5 billion, while Verizon’s (VZ) market capitalization was $241.3 billion.

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Sprint’s valuation metrics

On March 15, Sprint had a trailing 12-month EV-to-EBITDA multiple of ~4.74x—compared to peers’ multiples. Verizon, T-Mobile, and AT&T had trailing 12-month EV-to-EBITDA multiples of ~7.45x, ~7.75x, and ~6.94x, respectively.

Sprint expects its EV-to-EBITDA multiple in fiscal 2018 (year ending on March 31) to be ~4.70x. In fiscal 2019, the multiple is expected to be ~4.55x.

Short interest ratio

As of March 15, Sprint’s short interest as a percentage of float or short interest ratio was ~15.5%. When a stock’s short interest ratio is more than 40%, it indicates that traders and investors expect a correction in the stock’s price.

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