Shares of Sprint Nextel (NYSE:S) hit a 52-week high on Tuesday. Let's look at how it got here and whether clear skies are ahead.

How it got here
Just like larger rival AT&T (NYSE:T), Sprint is riding the iPhone 5 to new highs. Apple announced 5 million iPhone 5 unit sales over the device's launch weekend, some of which are bound for Sprint's network. With this year's model, Sprint's at a network disadvantage because one of the device's key selling points is its LTE data speeds, and Sprint's LTE network coverage lags significantly compared to AT&T and Verizon (NYSE:VZ).

Piper Jaffray surveyed prospective iPhone buyers last month and many said LTE wasn't that important to them, so Sprint's advantage (namely, unlimited data plans) might prove more relevant. Sprint also has one other thing that Ma Bell and Big Red don't: a prepaid iPhone offering on its Virgin Mobile brand. Prepaid is generally less profitable than postpaid, but every little bit helps when you're on the hook to buy $15.5 billion in iPhones from Apple.

In the three full quarters since getting the iPhone, Sprint has activated a total of 4.8 million units, and Apple has reported average selling prices in the neighborhood of $640 over the same time. That would imply nearly $3.1 billion of its iPhone purchase commitment met in the first three quarters, putting it on target to hit its goal within the specified four-year time frame.

CEO Dan Hesse also gave bulls some fuel last week when he predicted industry consolidation among the smaller players to challenge AT&T and Verizon. He then went on to say Sprint should return to profitability in 2014 after seven years of red ink.

How it stacks up
Let's see how Sprint compares to some of its wireless carrier peers:

S Chart

Sprint data by YCharts.

We'll include some fundamental metrics for a deeper read.

Company

P/S (TTM)

Sales Growth (TTM)

Net Margin (TTM)

Return on Equity (TTM)

Sprint

0.5

4.7%

(11.1%)

(34.1%)

AT&T

1.7

1.4%

3.7%

4.1%

Verizon

1.2

5.3%

10.2%

7.5%

Leap Wireless (NASDAQ:LEAP)

0.2

8.9%

(10%)

(47.4%)

MetroPCS (NASDAQ:TMUS)

0.9

11.4%

6.6%

11.2%

Source: Reuters.TTM = trailing 12 months.

Leap's Cricket brand also carries a prepaid iPhone, while MetroPCS has never gotten its hands on the device. Some analysts have speculated Sprint could consider buying MetroPCS if the aforementioned consolidation takes place.

What's next?
Sprint may see some near-term margin pressure related to the iPhone 5 launch and subsequent subsidies, but the company has come a long way in improving its balance sheet while focusing on beefing up its network.

 

Evan Niu, CFA owns shares of Apple, AT&T;, and Verizon Communications. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.