Head-To-Head Contrast: T-Mobile Us (PCS) and Sprint (S)

T-Mobile Us (NYSE: PCS) and Sprint (NYSE:S) are both mid-cap telecommunications services companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Profitability

This table compares T-Mobile Us and Sprint’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
T-Mobile Us N/A N/A N/A
Sprint -1.82% -3.19% -0.73%

Analyst Recommendations

This is a breakdown of recent ratings for T-Mobile Us and Sprint, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
T-Mobile Us 0 1 6 0 2.86
Sprint 5 10 1 0 1.75

T-Mobile Us currently has a consensus price target of $71.29, indicating a potential upside of 502.08%. Sprint has a consensus price target of $6.14, indicating a potential upside of 14.27%. Given T-Mobile Us’ stronger consensus rating and higher possible upside, research analysts clearly believe T-Mobile Us is more favorable than Sprint.

Insider & Institutional Ownership

13.7% of Sprint shares are owned by institutional investors. 0.2% of Sprint shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares T-Mobile Us and Sprint’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
T-Mobile Us N/A N/A N/A $0.24 49.33
Sprint $33.35 billion 0.64 -$1.21 billion ($0.15) -35.80

T-Mobile Us has higher earnings, but lower revenue than Sprint. Sprint is trading at a lower price-to-earnings ratio than T-Mobile Us, indicating that it is currently the more affordable of the two stocks.

Summary

T-Mobile Us beats Sprint on 8 of the 11 factors compared between the two stocks.

T-Mobile Us Company Profile

MetroPCS Communications, Inc. (MetroPCS Communications) is a facilities-based wireless broadband mobile communications provider in the United States, including the Atlanta, Boston, Dallas/Fort Worth, Detroit, Las Vegas, Los Angeles, Miami, New York, Orlando/Jacksonville, Philadelphia, Sacramento, San Francisco, and Tampa/Sarasota metropolitan areas. It offers wireless broadband mobile services under the MetroPCS brand in selected metropolitan areas in the United States. It provides a variety of wireless broadband mobile communications services to its customers on a no long-term contract, paid-in-advance basis. As of December 31, 2011, it had over 9.3 million customers. All of its services are provided through wholly owned subsidiaries of MetroPCS Wireless, Inc., an indirect wholly owned subsidiary of MetroPCS Communications. In January 2011, it introduced long term evolution (4G LTE) service plans.

Sprint Company Profile

Sprint Corporation (Sprint) is a holding company. The Company, along with its subsidiaries, is a communications company offering a range of wireless and wireline communications products and services that are designed to meet the needs of consumers, businesses, government subscribers and resellers. It operates through two segments: Wireless and Wireline. The Company offers wireless services on a postpaid and prepaid payment basis to retail subscribers and also on a wholesale basis. The Wireline segment provides voice, data and Internet Protocol (IP) communication services to its Wireless segment. The Company offers wireless and wireline services to subscribers in approximately 50 states, Puerto Rico, and the United States Virgin Islands under the Sprint corporate brand, which includes its retail brands of Sprint, Boost Mobile, Virgin Mobile and Assurance Wireless on its wireless networks utilizing various technologies.

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