Sprint's long-running gambit to harness the free cash potential of their spectrum and network equipment assets without having to give up using them has paid off quite well in some ways thus far, but only time will tell how it will pan out in the long run. One thing is for sure, though, and that is that Sprint's spectrum portfolio is absolutely massive. Their free cash plan, at this stage, involves about 10% of their spectrum assets, and they are confident that not only will they maintain full ownership of enough spectrum to stay competitive even if their leaseback agreements sour, but analysts are putting the value of their current portfolio at pretty enviable levels. This does not seem to be doing much for their worth at the moment, though.
According to analyst Jennifer Fritzsche with Wells Fargo pegs the entirety of Sprint's catalog, including what's currently being leveraged or earmarked for free cash flow generation, at about $117 billion. After deducting $32 billion for current debts and considering the number of Sprint shares currently live in the market, Fritzsche determined that Sprint stock is worth $21 per share for the spectrum value alone. This, of course, does not tell the full story. The story here, of course, is why Fritzsche is valuing Sprint stock between $8 and $10 per share, while actual prices on Friday hovered around $6.93 per share. That story is played out in what Sprint is doing with that spectrum and how it's affecting their bottom line.
Year on year, Sprint's Q2 for 2015 and 2016 paint a picture of a company on a steady decline. While Q2 of 2015 saw Sprint posting a $20 million total net loss, this year's Q2 report saw that number jump up ten times over and then some, landing at a pretty dismal $302 million. While this is partly due to conventional reasons like subscriber loss, Sprint's 173,000 postpaid adds tell a different story; a big part of the recent uptick in net loss is in network investments. Sprint's efforts to get some cash on hand aren't just to pay off debts, after all. They are also building out a small-cell 5G network based on the huge amount of high-band spectrum that they still have on hand from their iDEN and WiMax days, and using low-band spectrum to build out their current 4G LTE network. Analysts under the Jefferies banner aren't too optimistic about Sprint's gamble - they're putting the rating at "underperform" for the foreseeable future.