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Sba Communications (SBAC)
:SBAC
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SBA Communications
(NASDAQ:SBAC)
Rating:69Neutral
Price Target:
$247.00
â–²(7.71%Upside)
Positive Factors
Financial Strategy
Management's focus on growing dividends and considering further buybacks versus leverage reduction is seen as a positive strategy for SBAC.
New Leasing Deployments
SBAC is expected to trade at a premium to the broader REIT sector due to anticipated increases in domestic new leasing deployments, low leverage levels, and a growing international business exposure.
Negative Factors
International Market Risks
SBAC's international business growth may be hindered by elevated churn in Latin America due to carrier consolidation in Brazil.
Revenue Challenges
Sprint churn is expected to remain high for SBAC, posing a headwind to organic domestic revenue.
SBA Communications (SBAC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.64B
Dividend Yield1.94%
Average Volume (3M)720.99K
Price to Earnings (P/E)30.4
Beta (1Y)0.27
Revenue Growth-0.29%
EPS Growth47.83%
CountryUS
Employees1,720
SectorReal Estate
Sector Strength72
IndustryREIT - Specialty
Share Statistics
EPS (TTM)1.77
Shares Outstanding107,451,775
10 Day Avg. Volume712,447
30 Day Avg. Volume720,989
Financial Highlights & Ratios
PEG Ratio6.25
Price to Book (P/B)-4.97
Price to Sales (P/S)0.00
P/FCF Ratio22.74
Enterprise Value/Market Cap1.57
Enterprise Value/Revenue3.61
Enterprise Value/Gross Profit19.14
Enterprise Value/Ebitda5.55
Forecast
1Y Price Target
$252.70Price Target Upside10.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
SBA Communications Business Overview & Revenue Model
Company DescriptionSBA Communications Corporation is a first choice provider and leading owner and operator of wireless communications infrastructure in North, Central, and South America and South Africa. By Building Better Wireless, SBA generates revenue from two primary businesses site leasing and site development services. The primary focus of the Company is the leasing of antenna space on its multi-tenant communication sites to a variety of wireless service providers under long-term lease contracts. For more information please visit: www.sbasite.com.
How the Company Makes MoneySBA Communications generates revenue primarily through leasing antenna space on its wireless communications towers and other infrastructure to wireless service providers. The company enters into long-term lease agreements with customers, providing a stable and recurring revenue stream. Additionally, SBAC engages in site development services, which include designing and constructing wireless infrastructure for clients, further enhancing its revenue. Key revenue streams include monthly lease payments from tenants and fees from site development projects. The company's growth is supported by the increasing demand for data and wireless communication services, as well as strategic partnerships and contracts with major telecommunications companies.
SBA Communications Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 3.20%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements in domestic leasing growth, increased guidance, and strategic capital management. However, these were countered by challenges related to Sprint-related churn and international market churn, as well as negative straight-line revenue. The sentiment reflects a company that is navigating challenges while capitalizing on growth opportunities.Q1-2025 Updates
Positive Updates
Strong Domestic Leasing Growth
The U.S. mobile network operator customers increased their network investments, leading to the best quarter in several years for new domestic leasing business. The leasing backlog also grew, indicating a positive outlook for the rest of the year.
Increased Full Year Outlook for Services
Due to a strong start to the year and a growing backlog, SBA increased its full-year outlook for its Services business.
Successful Portfolio Management and Capital Allocation
SBA completed its exit from the Philippines and Colombia, improving focus and resource allocation. Additionally, SBA closed a portion of the Central American sites acquisition earlier than expected and announced a new $1.5 billion share repurchase plan.
Increased Full Year Guidance for Key Metrics
Full year guidance for Site Leasing Revenue, Tower Cash Flow, Adjusted EBITDA, AFFO, and AFFO Per Share was increased.
Share Repurchase and Dividend Growth
SBA repurchased 583,000 shares and announced a new $1.5 billion share repurchase plan. The quarterly dividend was increased by approximately 13% over the prior year.
Negative Updates
Sprint-Related Churn Impact
Sprint consolidation-related churn accounted for $20 million in Q1, projected to total $50-52 million for full year 2025.
International Churn and Market Challenges
International churn remained elevated due to carrier consolidation, impacting growth in markets like Brazil.
Negative Straight-Line Revenue
Straight-line revenue turned negative this year for the first time in five years, projecting further negativity next year due to maturing contracts.
Company Guidance
During the SBA's first quarter 2025 earnings call, the company provided updated guidance based on a strong start to the year. SBA increased its full-year outlook for several key metrics, including Site Leasing Revenue, Tower Cash Flow, Adjusted EBITDA, Adjusted Funds from Operations (AFFO), and AFFO per Share. The primary drivers for these increases included domestic organic leasing revenue growth of 5.2% on a gross basis and 1% on a net basis, alongside a 4.2% churn. Additionally, international organic leasing revenue growth was 1.6% net, with total international churn remaining elevated at 5.6%, largely due to carrier consolidation. SBA's U.S.-based Services business also performed well, surpassing expectations and contributing to the improved outlook. The company further demonstrated confidence by repurchasing 583,000 shares at an average price of $210.87 and announced a new $1.5 billion share repurchase plan. The leasing backlog increased, driven by new applications, and the mix of new leasing business shifted towards new lease colocations rather than amendments, signaling robust future growth.SBA Communications Financial Statement Overview
Summary
SBA Communications demonstrates strong revenue and profit growth, with solid cash flow generation. However, high financial leverage and negative equity present risks to financial stability. Continued focus on debt management and operational efficiencies will be crucial for sustaining growth.Income Statement
SBA Communications has shown consistent revenue growth with a notable increase in net income. The gross profit margin remains strong at 80.87% for TTM, indicating efficient cost management. However, the EBIT and EBITDA margins have slightly decreased, suggesting room for operational improvement.82
Very Positive
Balance Sheet
The company exhibits a high debt-to-equity ratio due to negative stockholders' equity, which raises concerns about financial leverage and stability. The equity ratio is negative, indicating high leverage, but the return on equity is positive due to strong net income performance.58
Neutral
Cash Flow
The operating cash flow is robust and aligns well with net income, demonstrating effective cash generation. The free cash flow has shown modest growth, supporting the company's ability to fund operations and investments, though fluctuations in financing cash flow may impact future flexibility.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.69B | 2.68B | 2.71B | 2.63B | 2.31B | 2.08B | Gross Profit |
| 2.02B | 2.10B | 2.08B | 1.96B | 1.76B | 1.61B | EBIT |
| 1.48B | 1.44B | 923.66M | 925.41M | 782.50M | 451.14M | EBITDA |
| 1.68B | 1.84B | 1.70B | 1.68B | 1.51B | 1.39B | Net Income Common Stockholders |
| 786.78M | 749.54M | 501.81M | 461.43M | 237.62M | 24.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 702.18M | 189.84M | 209.59M | 143.71M | 367.28M | 308.56M | Total Assets |
| 10.44B | 11.42B | 10.18B | 10.59B | 9.80B | 9.16B | Total Debt |
| 14.64B | 15.76B | 14.46B | 15.17B | 14.52B | 13.43B | Net Debt |
| 14.00B | 15.57B | 14.25B | 15.03B | 14.16B | 13.12B | Total Liabilities |
| 15.35B | 16.47B | 15.31B | 15.83B | 15.07B | 13.97B | Stockholders Equity |
| -4.97B | -5.11B | -5.17B | -5.28B | -5.28B | -4.82B |
| Cash Flow | Free Cash Flow | ||||
| 1.08B | 1.11B | 1.31B | 1.10B | 1.06B | 997.47M | Operating Cash Flow |
| 1.34B | 1.33B | 1.54B | 1.32B | 1.19B | 1.13B | Investing Cash Flow |
| -485.73M | -809.31M | -468.25M | -1.39B | -1.42B | -446.37M | Financing Cash Flow |
| -444.98M | 645.74M | -1.02B | -167.47M | 339.26M | -469.02M |
SBA Communications Technical Analysis
Positive
229.31
Price Trends
228.92
Positive
220.45
Positive
220.80
Positive
Market Momentum
-0.25
Negative
51.20
Neutral
64.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBAC, the sentiment is Positive. The current price of 229.31 is above the 20-day moving average (MA) of 228.73, above the 50-day MA of 228.92, and above the 200-day MA of 220.80, indicating a bullish trend. The MACD of -0.25 indicates Negative momentum. The RSI at 51.20 is Neutral, neither overbought nor oversold. The STOCH value of 64.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SBAC.
SBA Communications Risk Analysis
SBA Communications disclosed 34 risk factors in its most recent earnings report. SBA Communications reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
We hold some of our towers through rights of use agreements, which are terminable in accordance with the terms of the respective agreements and provide us limited visibility regarding the relationship between the owner of the towers and the land owner. Q4, 2024
2.
The wireless industry in our international markets has come under competition in recent years which has, and may continue to, adversely affect our international site leasing activities in the near term. Q4, 2024
SBA Communications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $86.36B | 91.73 | 7.08% | 2.12% | 6.36% | -3.54% | |
73 Outperform | $29.90B | 246.97 | -35.81% | 3.10% | 11.04% | -37.29% | |
69 Neutral | $24.64B | 30.35 | -14.67% | 1.94% | -0.29% | 47.83% | |
66 Neutral | $101.81B | 55.81 | 80.05% | 3.13% | -6.05% | -11.75% | |
59 Neutral | C$1.23B | 0.78 | -8.20% | 5.07% | 9.89% | -25.14% | |
57 Neutral | $1.00B | 15.56 | -3.72% | 3.68% | 2.44% | 305.26% | |
55 Neutral | $43.62B | 33.81 | -198.54% | 4.24% | -12.57% | -375.80% |
* Real Estate Sector Average
Performance Comparison
SBAC
SBA Communications
229.31
35.83
18.52%
AMT
American Tower
217.48
27.30
14.35%
CCI
Crown Castle
100.18
8.10
8.80%
EQIX
Equinix
882.88
145.89
19.80%
IRM
Iron Mountain
101.33
14.82
17.13%
UNIT
Uniti Group
4.08
1.43
53.96%
SBA Communications Corporate Events
Executive/Board ChangesShareholder Meetings
SBA Communications Holds Annual Shareholders Meeting
Positive
May 23, 2025
On May 23, 2025, SBA Communications Corporation held its Annual Meeting of Shareholders, where key decisions were made. Shareholders voted to elect three director nominees, ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for the 2025 fiscal year, and approved the compensation of the Company’s named executive officers. These decisions are expected to impact the company’s governance and financial oversight positively.
The most recent analyst rating on (SBAC) stock is a Hold with a $230.00 price target. To see the full list of analyst forecasts on SBA Communications stock, see the SBAC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.