SBA Communications Corporation (SBAC), headquartered in Boca Raton, Florida, is a leading independent owner and operator of wireless communications infrastructure with a presence in Central America, South America, Canada, and South Africa. Valued at a market cap of $24.4 billion, it primarily generates revenue through two segments: Site Leasing and Site Development.
Shares of this leading specialty REIT have underperformed the broader market over the past year. SBAC stock has gained 2.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.7%. In 2024, SBAC stock is down 9.9%, lagging behind SPX’s 18% rise on a YTD basis.
Narrowing the focus, SBAC stock has also lagged behind the iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT). The exchange-traded fund has returned about 17.7% over the past year and 16.1% on a YTD basis.
On Jul. 29, SBAC rose 1.5% following the Q2 earnings results. Its AFFO amounted to $354.3 million, or $3.29 per share, slightly beating analysts' $3.28 per share estimate. However, revenue came in at $660.5 million, slightly below the expected $664.5 million. For the full year, the company expects FFO between $13.06 and $13.43 per share, with revenue ranging from $2.64 billion to $2.67 billion.
For the current fiscal year, ending in December, analysts expect SBA Communications’ EPS to improve 4.9% year over year to $12.53 on a diluted basis. The company’s earnings surprise history is solid. It beat the consensus estimate in each of the last four quarters.
Among the 17 analysts covering SBAC stock, the consensus is a “Moderate Buy.” That’s based on 10 “Strong Buy” ratings, two “Moderate Buys,” and five “Holds.”
This configuration is less bullish than two months ago, with 11 analysts suggesting a “Strong Buy.”
On Aug. 14, Deutsche Bank Aktiengesellschaft (DB) analyst Matt Niknam increased the price target for SBA Communications from $230 to $240 while maintaining a “Buy” rating on the stock.
The mean price target of $240.06 represents a 5.1% premium to SBAC’s current price levels. The Street-high price target of $285 suggests an upside potential of 24.7%.
On the date of publication, Kritika Sarmah 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.
