Boca Raton, Florida-based SBA Communications Corporation (SBAC) is a real estate investment trust that owns and operates wireless communications infrastructure, including towers, buildings, rooftops, distributed antenna systems (DAS), and small cells. Valued at a market cap of $23 billion, the company generates revenues from two primary businesses, which are site leasing and site development services.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and SBAC fits right into that category, with its market cap exceeding this threshold. The leading REIT primarily focuses on leasing antenna space on its multi-tenant towers to a variety of wireless service providers under long-term lease contracts and also assists wireless service providers and operators in developing their networks through site acquisition, zoning, construction, and equipment installation.
Despite its strengths, the company has declined 17.3% from its 52-week high of $256.68, achieved on Dec. 27, 2023. Moreover, shares of SBAC have decreased 13.4% over the past three months, massively underperforming the broader Nasdaq Composite’s ($NASX) 14.7% gains over the same time frame.
Moreover, in the longer term, SBAC has declined 14.6% over the past 52 weeks, significantly underperforming NASX’s 36.2% returns. On a YTD basis, shares of SBAC are down 16.3%, massively lagging behind NASX’s 34.4% gains over the same time frame.
To confirm its bearish trend, SBAC has been trading below its 200-day moving average since mid-December and has remained below its 50-day moving average since late October.
On Oct. 28, SBAC released its Q3 earnings results and shares of SBAC fell 3.4% the following day. The company’s AFFO marginally declined year-over-year to $3.32 per share but came in line with the consensus estimates. At the same time, its revenue of $667.6 million fell 2.2% annually and missed the consensus estimates of $669 million. Lower site development revenues coupled with a decline in international cash site leasing revenues contributed to the company’s top-line miss.
SBAC’s underperformance becomes more evident when compared to its rival, American Tower Corporation (AMT), which declined 8.7% over the past 52 weeks and 10.3% on a YTD basis.
Despite SBAC’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 18 analysts covering it, and the mean price target of $257.59 suggests a massive 21.3% premium to its current levels.
