Tuesday morning, cell phone company Sprint Corp. (NYSE: S) came out with earnings that impressed Wall Street. This gave relief to shareholders, which saw their shares increase 6% during morning trading. However, Sprint shares are still down 12% year to date, versus a 54% increase for T-Mobile shares.
On a short-term basis, it is about beating Wall Street expectations. People getting into Sprint shares now may catch a turnaround wave that may translate into a significantly higher share price. In contrast, T-Mobile US Inc. (NYSE: TMUS) shares may have reached most of their potential for the time being, based on Wall Street estimates.
Sprint now sees an improving customer base along with T-Mobile. Sprint saw total net additions of 675,000, versus net losses of 220,000 the same time last year. This stems from the fact that Sprint lost fewer postpaid and, to a lesser extent, prepaid phone customers. Sprint’s wholesale net additions improved to 731,000 from 503,000 the same time last year, according to its latest earnings announcement.
Moreover, Sprint keeps a tight lid on expenses, which offset its steep decline in revenue of 9%. As a result of the added optimism, it boosted its adjusted EBITDA outlook for fiscal 2015 from “$6.5 to $6.9 billion to a range of $7.2 and $7.6 billion.” Sprint’s capital expenditure outlook remains at $5 billion.
T-Mobile kept its adjusted EBITDA the same in the range of “$6.8 to $7.2 billion.” However, the company boosted its branded postpaid net customer addition outlook to “3.4 and 3.9 million” from “3.0 to 3.5 million.” T-Mobile kept its capital expenditures outlook the same for its fiscal 2015.
Wall Street sees Sprint stock price as having a great deal more room to run. Sprint has a mean target price of $7.28 per share, which represents a whopping 106% potential return. T-Mobile has a mean target price of $42.95 per share, which represents a mere 3% potential return.
ALSO READ: 5 Analyst Stock Picks From July That Could Double
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
