Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) 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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and generally higher debt management risk.
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Highlights from the ratings report include:
- S's revenue growth has slightly outpaced the industry average of 1.0%. Since the same quarter one year prior, revenues slightly increased by 6.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, S's share price has jumped by 63.36%, exceeding the performance of the broader market during that same time frame. 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.
- 43.60% is the gross profit margin for SPRINT NEXTEL CORP which we consider to be strong. Regardless of S's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, S's net profit margin of -15.50% significantly underperformed when compared to the industry average.
- 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.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Wireless Telecommunication Services industry. The net income has significantly decreased by 62.2% when compared to the same quarter one year ago, falling from -$847.00 million to -$1,374.00 million.
Sprint Nextel Corporation, together with its subsidiaries, offers wireless and wireline communications products and services to individual consumers, businesses, government subscribers, and resellers in the United States, Puerto Rico, and the United States Virgin Islands. The company has a P/E ratio of -4.3203, below the S&P 500 P/E ratio of 17.7. Sprint Nextel has a market cap of $16.59 billion and is part of the
industry. Shares are up 133.3% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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