Sprint Nextel (NYSE:S) hit a new 52-week low today after it announced lower revenue and earnings on a net decline of 60,000 wireless subscribers in the third quarter. This contrasts to substantial additions of new subscribers at rival companies AT&T and Verizon Wireless. The company also said that it expects net customer additions to continue to be pressured in the fourth quarter.

Sprint has been underperforming its industry for some time now. The company's recent quarterly revenue growth came in at just 1.5% compared to an industry average 19.2%. Meanwhile, the company's stock is trading at 140x earnings while the industry sits at 23x earnings. Even the company's PEG ratio - which accounts for growth - is substantially higher than the industry's ratio.

Sprint's strong top and bottom line growth in recent years seems to be slowing down considerably as it has hit more competition. The company's latest earnings announcement disappointed investors that have become accustomed to an average 7.5% earnings surprise. Meanwhile, the company continues to be overvalued and trading at just 5x times cash flow, indicating that investors are assigning little value to the company's non-cash assets and earnings potential.

Problems are only compounded when we take a look at Sprint's competitors. AT&T added two million subscribers during the same period while Verizon added 1.6 million subscribers. The company said it plans to combat this by simplifying its pricing plans and other packages available to customers and eventually finding a replacement for ex-CEO Gary Forsee.

In the end, Sprint shares deserve to be trading at their current levels right now. The company is struggling to keep up the growth rates that Wall Street is accustomed to while many of the company's new initiatives (such as WiMax) remain unproven. Regardless, S is definitely a stock to watch going forward.

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