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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.
