Will Clearwire’s Stock Continue Its Ascent?

December 16, 2012

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E = Equity to Debt Ratio Is Weak

The debt-to-equity ratio for Clearwire is on the high side. The balance sheet is in negative territory, but there are much worse situations out there in that regard. MetroPCS Communications (NYSE:PCS) and Leap Wireless (NASDAQ:LEAP) have been listed for comparative purposes.

	Debt-To-Equity	Cash	Long-Term Debt
CLWR	1.86	$1.18 Billion	$4.27 Billion
PCS	1.44	$2.57 Billion	$4.78 Million
LEAP	6.35	$623.03 Million	$3.20 Billion

T = Technicals on the Stock Chart Are Mixed

Clearwire’s stock has moved violently this year, but overall it has performed well. The same can’t be said for the three-year timeframe.

	1 Month	Year-To-Date	1 Year	3 Year
CLWR	42.12%	62.63%	46.74	-48.95
PCS	-1.77%	14.98%	17.00%	43.60%
LEAP	12.69%	-27.34%	-16.04%	-55.80%

At $3.16, Clearwire is currently trading above all its averages. This makes a $2.90 bid look enticing.

50-Day SMA	2.07
100-Day SMA	1.79
200-Day SMA	1.68

E = Earnings Are Poor, But Revenue Has Been Impressive

Annual revenue is the most impressive component for Clearwire. However, this company is due to lose $1 billion this year.

	2007	2008	2009	2010	2011
Revenue ($)in millions	N/A	20.49	243.77	535.10	1.25B
Diluted EPS ($)	N/A	-.28	-1.74	-2.46	-3.07

The last quarter tells a different story YoY. Revenue decreased while earnings improved, or perhaps we should say that earnings were less worse.

	9/2011	12/2011	3/2012	6/2012	19/2012
Revenue ($)in millions	332.18	361.87	322.64	316.93	313.88
Diluted EPS ($)	-.54	-.59	-.44	-.33	-.34

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