Are You Running Away From Sprint?

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As analysts lose faith in Sprint Nextel (NYSE: S  ) , Fools are buying in. A quick look at the scorecard data in Motley Fool CAPS shows 15 new ratings of the stock following the carrier's uninspiring second-quarter earnings report on Thursday. So far, every single call is for the stock to outperform.

Call it a leap of faith. Shares of Sprint fell 17% after the carrier reported a $0.28-per-share loss, well below the $0.12 consensus that analysts had been calling for, Barron's reports. Revenue rose 4%, but Sprint's subscriber count dropped again -- this time by 101,000.

Could it be Apple's (Nasdaq: AAPL  ) iPhone at work? Sprint is the only carrier among the Big Three to not have the device on its network. Both AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) reported strong Q2 earnings thanks in part to a wave of iPhone activations. Further gains could follow if reports prove true that the Mac maker plans to release its fifth-generation handset this fall.

Wall Street doesn't hold out as much hope for Sprint -- over the short term, anyway. A survey of analyst ratings by Barron's  writer Tiernan Ray found that analysts at Wells Fargo, Citigroup, and RW Baird & Co. revised their subscriber targets downward. All three had expected net gains for the year. They now expect net losses, presumably at the hands of iPhone-wielding peers.

Do you agree with the analysts, or are you a buyer at these levels? Please vote in the poll below, and then leave a comment to tell us your thoughts about Sprint's business. You can also add Sprint Nextel to your watchlist for up-to-date analysis on the stock as soon as it's published.

Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

The Motley Fool owns shares of Apple.Motley Fool newsletter services have recommended buying shares of Apple and AT&T and creating a bull call spread position in Apple. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.


Read/Post Comments (6) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 30, 2011, at 7:23 PM, lee654 wrote:

    I think if Apple signs on there could be a great upside. My favorite stocks in this order Apple, Bidu, Google, Amazon, China mobile, Coke, Pepsi, AT&T, EMC, Verizon, TD Ameritrade and Bank of America. Sleepers TGB , PZG

  • Report this Comment On July 30, 2011, at 11:31 PM, conradsands wrote:

    Consumers are finally noticing that AT&T and Verizon = The Most Expensive Wireless Plans in America. We know where Verizon (the 10th leading U.S. lobbyist) and AT&T (the 12th leading U.S. lobbyist) get all that money to run commercials 24x7, pay out huge “fat cat” executive bonuses and hire armies of lawyers and lobbyists to push the U.S. market into a wireless industry duopoly -- the American consumer.

    Taking into account the whole U.S. market, a combination of Dallas-based AT&T and T-Mobile will raise the Herfindahl-Hirschman Index (HHI), an accepted measure of market concentration, to 3,216 from 2,848, according to a Bloomberg analysis. Any score above 2,500 indicates a highly concentrated market, and any increase of more than 200 points clearly enhances market power, according to federal guidelines.

    If this ridiculous deal goes through, Sprint will be the only low-priced post-paid national wireless carrier left in the United States. T-Mobile customers are already fleeing to Sprint because they know they won’t get low prices from AT&T or Verizon. But AT&T and Verizon are two of the top corporate lobbyists in the country, so I'm sure the Feds are happy to oblige anything they want to do to secure a stranglehold on the market at the expense of the consumer.

    Sprint tied for the number one spot among major wireless carriers for customer satisfaction, according to results from the 2011 American Customer Satisfaction Index. The ACSI survey also shows that Sprint is the number one most improved company in customer satisfaction, across all industries, over the last three years.

    With ACSI scores that continue to trend up since 2008, Sprint is the only major carrier continuing to make improvements in overall customer satisfaction. The ACSI survey also finds Sprint, for the first time, reaching the top spot among major carriers in customer value since ACSI started measuring wireless carriers seven years ago.

  • Report this Comment On July 30, 2011, at 11:31 PM, conradsands wrote:

    AT&T’s Dirty Money at Work …

    Snippets from CNN story …

    AT&T lobbyists push for T-Mobile deal

    For years, AT&T has been one of the biggest political and lobbying forces in Washington, D.C. Last year, it spent $15.3 million and had 93 lobbyists on its roster, including six former lawmakers. Germany's Deutsche Telekom spent $3 million on lobbying for T-Mobile USA in 2010, armed with 41 lobbyists and one former lawmaker.

    Many lawmakers have a personal interest in seeing AT&T do well. AT&T ranked as the sixth most popular investment among members of the House and Senate in 2009, the most recent year for which such data is available, according to the Center for Responsive Politics.

    And AT&T is considered a heavy hitter during campaign election cycles. In 2010, donors with links to the company made nearly $4 million in campaign contributions to candidates running for federal office.

  • Report this Comment On July 31, 2011, at 10:41 AM, azainali wrote:

    you should add also I own sprint share but not buying more . As sprint shareholder and property owner in kansas city head quarter of sprint watching sprint closely wanted to try four G wide range band internet .customer srvice sucks no continuity in service poor poor customer service bunch of idiots on the other side when call , operator never gives last name or extension to call back very disappointed CEO must be ashamed of himself running down this company which should have great potential

  • Report this Comment On August 02, 2011, at 3:14 AM, Allstar13913 wrote:

    Where is the option for "I have shares, but I'm not ready to sell yet?"

  • Report this Comment On August 03, 2011, at 2:41 PM, TMFDivine wrote:

    Or: "I have shares, but no money to buy more of them?"

    Also, on Sprint, I must say that I just do not think it will be a successful company in the long-run. I'm not surprised that analysts have revised their subscriber targets downward, as revenues have been consistently trending down for years now.

    HOWEVER, that does not mean that Sprint is currently overvalued. I think that anything under $4/share is a deal, as it will be back up to $5 within a year and then I'd get out of it unless things start to look better. Not a stock I would typically buy, but with some extra money to play around with it is worth the risk.

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