Move over, Lockheed Martin.

Take a back seat, Fannie Mae.

There's a new kid in town to challenge your reign as Washington's biggest businesses.

As of today, Sprint Nextel Corp. is the Washington area's No. 1 company based on stock market valuation.

Kansas-based Sprint and Reston's Nextel completed their $35 billion merger on Friday. Today, the combined company's stock begins trading on the New York Stock Exchange under the symbol S, which was the single-letter symbol for Sears, Roebuck and Co. before Sears was acquired by Kmart Holding Corp.

And today the corporate headquarters officially moves to Reston -- though many of the Sprint executives who are coming to town are still in transition, and the company's operational headquarters will remain in Overland Park, Kan., a suburb of Kansas City.

This is the end of the road for what has been one of the region's best-performing technology stocks, at least over the past three years. After surviving the telecommunications crash -- which knocked its shares from almost $80 to under $3 -- Nextel stock climbed from a low of $2.78 a share three years ago to $33.32 when the stock stopped trading on Friday.

In the merger, Nextel shareholders will get the equivalent of 1.3 shares of Sprint Nextel for each of their Nextel shares. Less than $1 a share of that is expected to be cash, the rest will be stock, which will be tax-free. The exact payout is based on a formula so complex that the company plans to issue a preliminary breakdown before the market opens today and will not have a final number until later in the week.

The question for Washington investors in Nextel is what to do next. Should they keep their Sprint Nextel stock or cash in?

Wall Street is certainly high on Sprint. Twenty of the 25 analysts who follow the company rate the stock "buy" according to Bloomberg, the business news and data service.

That's an 80 percent endorsement -- twice the rate of "buys" for Verizon Communications Inc., which is the second-highest rated telephone company.

In contrast, the stock of Washington's other big phone company, MCI, gets "hold" ratings from 90 percent of the analysts who follow the company.

Typical of analysts' comments on Sprint Nextel is the love poem posted last week by First Global Ltd., a British firm that, unlike many of the big U.S. investment houses, doesn't do business with either Sprint or Nextel.

Naming Sprint "our top pick among the U.S. integrated telecom players," the London analysts said, the "merger with Nextel makes us believe that there is potential for a substantial upside to the stock from the current levels."

Sprint and Nextel shares have climbed since the merger agreement was announced in December, with Nextel stock up more than 16 percent year-to-date and Sprint up 8.5 percent. Both stocks slipped on Friday as some speculators cashed in their shares rather than wait for the final settlement.

With 44 million customers, Sprint Nextel is the No. 3 player in the wireless phone business, behind Verizon Wireless and Cingular.

Sprint alone generated a much larger portion of its business from cell phones than do the old-line phone companies that own Verizon Wireless and Cingular. And Nextel was what Wall Street calls a "pure play" on the growing wireless business.

CIBC World Markets calls wireless "the most attractive long-term sector" of the communications business. The New York office of CIBC also calls Sprint Nextel the "top large-cap pick" in telecom.

Because so much of its business comes from wireless, Sprint Nextel should generate the fastest earnings growth of any big telecom company, CIBC said in its analysis issued on the eve of the merger.

"Sprint is outperforming because it has the right mix of assets and strategy," CIBC added.

The combined company's strategy calls for shifting the mix even more toward wireless by spinning off Sprint's local phone business. Sprint will put its local service operations into a new venture, then distribute shares of that venture to its shareholders.

Except to the extent that it makes Sprint more of a wireless company, that transaction shouldn't have much impact on Sprint Nextel stock. Wall Street has already factored the spinoff into the stock price.

The spinoff, however, will affect Sprint Nextel's standing among Washington companies. Adding Sprint's $27.4 billion in revenue last year to Nextel's $13.4 billion produces a nearly $41 billion-a-year operation -- substantially bigger than Lockheed Martin, which last year had sales of $35.5 billion. Fannie Mae, which is revising its financial statements for the past few years, has reported a 2004 revenue of $53 billion. But financialinstitution revenue isn't directly comparable to that of other kinds of companies (which is why the Fortune 500 ranks the 500 largest industrial companies).

Spinning off the local phone service is expected to bring Sprint Nextel's revenue down to about $34 billion, slightly less than that of Lockheed Martin, analysts at Legg Mason in Baltimore estimated Friday.

On a stock market valuation basis, Legg Mason estimated the combined Sprint Nextel will be worth $79 billion, roughly equal to the combined market capitalization of Fannie Mae (at $50 billion) and Lockheed Martin (at $28 billion).

Not everyone sees smooth sailing for the new Sprint Nextel.

Legg Mason offers what it calls "a somewhat contrarian view" of the merger, rating the stock "hold" because of "financial and operational challenges that Sprint Nextel must confront over the next two to three years."

At the top of Legg Mason's list of concerns is what will be done with several partnerships and affiliations that will be affected by the merger.

Sprint on Friday untangled one of those deals by buying 95 percent of the stock of US Unwired Inc., a regional distributor of Sprint cell phones. Sprint's contracts with several other regional partners have provisions that could force Sprint to buy out them as well.

Nextel owns a small stake in NII Holdings of Reston (NIHD on Nasdaq), which provides mobile phone service in Latin America under the Nextel brand and a big piece of Nextel Partners (NXTP on Nasdaq), based in Washington state, which provides Nextel service in smaller cities and rural areas.

Sprint Nextel could simply sell its stock in NII holdings, but Nextel Partners is more complicated. As with Sprint's affiliates, Nextel Partners has the right to require its parent company to buy it out under certain circumstances -- this merger among them.

Analysts assume that Nextel Partners will probably trigger that provision soon, but there is considerable disagreement over how much a buyout would cost.

Some analysts argue that Sprint Nextel will have to pay a premium and are recommending that clients buy Nextel Partners stock in hope of making a quick profit. Others predict Nextel Partners will be bought at a discount because as the majority owner, Sprint Nextel holds all the cards.

There is also, of course, the risk involved in any big merger -- that integrating two operations will prove more difficult and costly than expected, which could wipe out the big cost savings the merger is supposed to create.

There are also tough technology problems to solve. The two cell phone systems use totally different, incompatible technologies. The big challenge will be moving Nextel onto Sprint's more advanced network while maintaining the "push to talk" feature that has been Nextel's biggest selling point. And there's a longer-term concern: Despite all the efforts by the phone companies to hook customers on ever-costlier features such as Web browsing and video, cell phones are becoming so ubiquitous that the mobile phone industry could eventually go the way of long-distance, becoming a barely profitable commodity business.

Timothy M. Donahue, left, chief executive of Nextel, and Gary D. Forsee, chief executive of Sprint. The merged company's stock begins trading today.