MetroPCS Communications, Inc. Message Board
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Valuation
PCS trading at 11 PE and .6 Sales.
AT&T / Verizon trading at 45 PE and average P/S of 1.35
Put PCS at 1.35 Sales = $6.75 Billion
Put PCS at 45 PE = $12 Billion
No wonder Spring ALMOST paid $8 Billion for PCS in February.
Looks like $5 Billion would be a rational ABSOLUTE minimum valuation for PCS.
65% UNDER VALUED? Minimum???-
If this breaks previosu day high of $8.89 could see a run to the long term $9.25 to $9.35 downtrend line in the coming hours or days.
We shall see.- 1 Reply to netstockreader
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Still looks like $9.25 to $9.35 is the level that it should find decent resistance.
It is the long term (Last 15 months) downtrend line.
After that it looks like $10.30...then $12.45 and then there is ZERO resistance (huge gap) to $16'ish.
Not predicting ANYTHING...just pointing it out.
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Let me get this straight...
$5 Billion Valuation (which would be $13.50 per share)...
That would be 1 Times Sales.
That would be 13 times reasonable estimates of $1.00 per share earnings for 2013.
$13.50 would still represent an incredibly reasonable valuation.
Wow.- 1 Reply to netstockreader
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By the way...
They just reported $.41 per share in the most recent quarterly report.
Annualized that would be $1.64 per share earnings.
Now...they focused on cash flow and earnings this quarter as they await the rollout of 4G LTE enabled smartphones at the end of the current quarter...so assume that $.41 was slightly high for those reasons.
Let's say $.30 per quarter is more reasonable...
That is $1.20 per share annual earnings power while the street currently has them pegged around $.65.
That is the fundamental reason for 32 Million shares trading hands yesterday.
Also...doesn't hurt that Sprint came within a whisker of paying $8 Billion for PCS 5 months ago and that T-Mobile has recently been rumored to be very interested in doing a deal.
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PCS earned 41 cents per share in 2Q. The market is just starting to get an inkling of the company's earning power. And, CEO Lindquist confirmed MetroPCS will launch "LTE for Everyone" wireless service in major metropolitan areas in 3Q. MetroPCS will soon be selling smartphones at $100-125 price points, and offering wireless broadband for $40/month on its blazing fast LTE network. That's a pretty compelling offering.
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