Sprint Nextel Corp Stock Hold Recommendation Reiterated (S)

Sprint Nextel (NYSE:S) has been reiterated by TheStreet Ratings as a hold with a ratings score of C-
By TheStreet Wire ,

NEW YORK (

TheStreet

)

-- Sprint Nextel

(NYSE:

S

) has been reiterated by TheStreet Ratings as a hold with a ratings score of C-. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and generally higher debt management risk.

Highlights from the ratings report include:

  • S's revenue growth has slightly outpaced the industry average of 1.9%. Since the same quarter one year prior, revenues slightly increased by 0.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Powered by its strong earnings growth of 27.58% and other important driving factors, this stock has surged by 107.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SPRINT NEXTEL CORP has improved earnings per share by 27.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SPRINT NEXTEL CORP reported poor results of -$1.45 versus -$0.96 in the prior year. This year, the market expects an improvement in earnings (-$0.82 versus -$1.45).
  • Net operating cash flow has declined marginally to $940.00 million or 3.88% when compared to the same quarter last year. Despite a decrease in cash flow SPRINT NEXTEL CORP is still fairing well by exceeding its industry average cash flow growth rate of -18.49%.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Wireless Telecommunication Services industry and the overall market, SPRINT NEXTEL CORP's return on equity significantly trails that of both the industry average and the S&P 500.

Sprint Nextel Corporation, through its subsidiaries, offers a range of wireless and wireline communications products and services to individual consumers, businesses, government subscribers, and resellers in the United States, Puerto Rico, and the U.S. Virgin Islands. Sprint Nextel has a market cap of $21.3 billion and is part of the technology sector and telecommunications industry. Shares are up 24.5% year to date as of the close of trading on Tuesday.

You can view the full

Sprint Nextel Ratings Report

or get investment ideas from our

investment research center

.

--Written by a member of TheStreet Ratings Staff.

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