With a market cap of around $22 billion, SBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure, specializing in developing and leasing towers, buildings, rooftops, and distributed antenna systems across the Americas, Africa, and Asia. With a strong focus on long-term lease agreements and comprehensive site development services, SBA continues to drive innovation in the telecommunications industry as a top Real Estate Investment Trust (REIT).
SBAC is expected to release its fiscal Q4 earnings results on Monday, Feb. 24. Ahead of this event, analysts project the communications tower operator to report an AFFO of $3.21 per share, reflecting a decrease of 4.8% from $3.37 per share in the year-ago quarter. However, the company holds a solid track record of consistently surpassing Wall Street's bottom-line estimates in the last four quarterly reports. In the most recent quarter, SBAC surpassed the consensus AFFO estimate by 4.7%.
For fiscal 2024, analysts forecast SBAC to report an AFFO of $12.57 per share, down 4.6% from $13.18 per share in fiscal 2023.
SBA Communications have declined 13% over the past 52 weeks, underperforming the broader S&P 500 Index's ($SPX) nearly 25% gain and the Real Estate Select Sector SPDR Fund's (XLRE) 7.4% returns over the same time frame.
Shares of SBA Communications fell 3.4% following its mixed Q3 financial results on Oct. 28. While Q3 AFFO per share of $3.32 met estimates, the reported quarterly revenue of $667.6 million missed the consensus estimate and reflected a year-over-year decline of 2.2%. Declines in site-leasing and site-development revenues, coupled with a slight dip in adjusted EBITDA margin, raised investor caution. Furthermore, the company's high net debt-to-EBITDA ratio and a cash position decline to $263.6 million added to investor unease regarding financial flexibility.
Analysts' consensus view on SBA Communications stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 18 analysts covering the stock, nine suggest a "Strong Buy," two give a "Moderate Buy," and seven recommend a "Hold." This configuration is slightly less bullish than three months ago, with 10 analysts suggesting a "Strong Buy."
As of writing, SBAC is trading below the average analyst price target of $252.88.
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