Apple (AAPL) wasn't the only company tied to smart phones last night. Sprint (S) managed to beat EPS estimates by a significantly higher percentage than Apple. Unfortunately expectations were for only one cent of EPS so the 400% beat produced only 4 cents in earnings. Unlike Apple, Sprint experienced a drop in revenues but it did increase its EBITDA expectations.
Sprint has one big problem going forward. It's not expected to have any significant EPS growth for the next couple years. It is expected to loss 9 cents in the next fiscal year ending in March 2019 and lose 4 cents in the year after that. Revenue growth was flat this quarter but had declined the last four quarters.
This lack of growth is readily apparent in the chart pattern. Sprint hit $9.50 in early 2017 and has been meandering around the $5 range recently. It is below its 200-day simple moving average and to say it has a lack of momentum would be an understatement.
Some longer term value players may find something of interest in Sprint but it looks like dead money in the near term. I would tak a closer look at it if it manged to trade back up over $5.75 but I would avoid the stock for now.
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As the market has encountered a bit of volatility and tech stocks began to falter overall, many cloud companies have outpaced the market on the way down.
Look for the big-cap stocks that only come in on tough days -- and take advantage of their weakness at the open.
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