Yes, it is true that Sprint is looking good right now. This stock hit a 52-week-high going to $5.37 on Tuesday. This made people think that this company could actually be a contender once again. I know as an investor that you could be tempted since the stock still has not hit the UBS’ target price of $5.50 but the run really could be over. Even though things look good now there could be trouble ahead for this company which would not make it a good investment.
One of the reasons that Sprint and its great run could be over is because it does not have an iPhone. Verizon has not become the giant some analysts believed it would become because it has the iPhone but it has drawn quite a few people over because of this. Soon Sprint will be the last major national mobile provider that does not support Apple’s highly successful phone. ATT activated 3.6 million iPhones in the first quarter of 2011 alone.
You have to look at the long term track record. Sprint has not turned a profit since 2007. The company’s reported operating loss was $595 million in 2010 and a net loss of nearly $3.5 billion. The company did in fact beat the expectation for the first quarter but if you look at the other factors that we have discussed it does not look like Sprint has a bright future.