Based in Boca Raton, Florida, SBA Communications Corporation (SBAC) owns and operates wireless communications infrastructure and is a prominent real estate investment trust (REIT). Valued at a market cap of $26.1 billion, the company primarily focuses on leasing antenna space on its multi-tenant towers to various wireless service providers under long-term lease contracts.
Companies worth more than $10 billion are generally described as “large-cap” stocks, and SBA Communications fits right into that category. With a portfolio of more than 39,000 communications sites, SBAC owns and operates wireless communications infrastructure, including towers, buildings, rooftops, distributed antenna systems (DAS), and small cells.
Despite a 4.7% decline from their 52-week high of $258.76, which they hit in December last year, shares of this communications tower operator have gained 25.8% over the past three months, surpassing the broader S&P 500 Index’s ($SPX) 3.7% return over the same time frame.
However, in the longer term, SBAC stock is down 2.8% on a YTD basis, lagging behind SPX’s 18.1% gains. Shares of SBAC have gained 13% over the past 52 weeks, compared to SPX’s 26.5% returns over the same time frame.
Nevertheless, SBAC has been trading above its 200-day moving average since mid-August and has remained above its 50-day moving average since early July, indicating a bullish trend.
SBAC's shares have struggled over the past year due to elevated interest rates, high customer concentration, and sluggish wireless carrier activity. However, recent price gains reflect investor optimism about its growth strategies, including expanding communication sites and tower portfolio. Moreover, despite missing revenue estimates and trimming its annual revenue forecast, the stock rose marginally following its better-than-expected Q2 AFFO of $3.29 per share on Jul. 29 due to its stronger international leasing activity, which offset the impact of slower 5G leasing growth in the U.S.
Highlighting the contrast in performance, SBAC has lagged behind its rival American Tower Corporation’s (AMT) 11.9% YTD gains and 34.1% returns over the past 52 weeks.
Despite SBAC's underperformance over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 17 analysts covering the stock, and as of writing. However, the stock is trading above its mean price target of $240.06.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
