Sprint (S:NYS) Fundamental Valuation Report

Fundamental Valuation Report


Communication Services:Telecom Services

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$6.28 (USD) 10/01/2019

Weighted Valuation
$6.84 (USD)

Overall Rating
Undervalued by 8.9%

Valuation Models Analyst Consensus: $6.50 (USD)
(in order of importance) Comparables: $7.53 (USD)
Adjusted Book Value: $6.49 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation

Company Overview (S:NYS USD)

Price 6.28
Range 6.21 – 6.39
52 week 4.85 – 6.55
Open 6.23
Vol / Avg. 12.02M/12.76M
Mkt cap 25.61B
P/E 3.56
Div/yield 0.00/0.00
EPS 1.81
Shares 4.08B
Beta 0.63

Company Description

A decade of operational problems has considerably diminished Sprint’s position in the wireless industry. It is now the fourth-largest carrier in the United States, serving 27 million postpaid and 9 million prepaid phone customers directly and 13 million via wholesale channels. Over the past five years, the firm’s share of the postpaid phone market has declined about 1 percentage point to 12%, leaving it about three fourths the size of T-Mobile US, the next smallest carrier. About 5% of sales come from the wireline unit, which provides phone and data services to the wireless unit and external customers. Japanese firm Softbank took a 78% stake in Sprint through the purchase of existing Sprint shares and a $5 billion equity infusion in 2013; it has since increased its stake to 85%.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for S:NYS

Using a discounted cash flow model we generated an intrinsic value of $30.30 (USD) for S:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

S:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $30.30 1% 5% 1% 5%
WACC (or Ke) 5.82 $40.17 $23.71
Terminal Growth Rate 0.80 $24.24 $39.36
Tax Rate 0.23 $33.50 $27.10
Cash Flow 13,539,153,600 $27.84 $32.75
Capital Expenditures 0 $30.30 $30.30
Long Term Debt 36,555,000,000 $30.74 $29.85

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $7.53 (USD) for S:NYS. We also generated a valuation of $8.01 (USD) using other metrics and comparables.
The comparable companies were American Tower (AMT:NYS), CenturyLink (CTL:NYS), SBA Communications (SBAC:NAS) and T-Mobile US (TMUS:NAS).

Company S:NYS End Date Value
Earnings/Share $1.86 (USD)
Book Value/Share $6.97 (USD)
Sales/Share $8.05 (USD)
Cash Flow/Share $2.62 (USD)
EBITDA/Share $2.75 (USD)
Price Based on Comps Adjustment Factor (%)
$16.36 (USD) 0.0
$10.22 (USD) -68.7
$7.89 (USD) -61.7
$24.52 (USD) -5.6
$0.00 (USD) 49.6
3.13 PE Ratio 25.69 59.47 6.47 0.00 11.12
0.84 PB Ratio 5.32 13.02 0.72 0.00 2.22
0.72 PS Ratio 5.55 9.93 0.68 10.31 1.29
2.22 PCF Ratio 13.19 21.26 2.50 22.11 6.90
4.72 EV to EBITDA 15.94 24.17 6.54 27.34 5.73


Using a multiples approach we generated a valuation of  $10.72 (USD) for S:NYS

Company S:NYS End Date Value
Earnings/Share $1.86 (USD)
Book Value/Share $6.97 (USD)
Sales/Share $8.05 (USD)
Cash Flow/Share $2.62 (USD)
EBITDA/Share $2.75 (USD)
Price Based on Comps Adjustment Factor
$5.95 (USD) 0
$6.44 (USD) 0
$6.32 (USD) 0
$14.86 (USD) 0
$20.04 (USD) 0
Ratios Ratio Average
PE Ratio 3.20
PB Ratio 0.92
PS Ratio 0.79
PCF Ratio 5.68
EV to EBITDA 7.28

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  S:NYS for the last 10 years was  0.92

We ran the Adjusted Book Value for  S:NYS and generated a book value of  $7.09 (USD)
By multiplying these we get an adjusted valuation of  $6.49 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for S:NYS. The 1 analysts have a concensus valuation for S:NYS for 2020 of $6.50 (USD).

S:NYS Sprint

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 4 0 3.0000 Hold 2019-1-9

Current Price: 6.28 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 0.06 0.03 -0.23
# EPS Analysts 3 2 1
Mean Revenue 32,672.30 33,406.50 32,776.50
# Revenue Analysts 3 2 1
Mean Target Price 6.50
Mean Cash Flow 2.41 2.64 2.71
Mean EBITDA 11,031.50 13,115.70 13,431.70
Mean Net Income 99.70 103.90 -948.80
Mean Debt Outstanding 33,464.20 34,731.10 34,351.90
Mean Tax Rate
Mean Growth Rate 62.94
Mean Capital Expenditure 12,213.30 11,851.60 12,054.70

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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