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Sba Communications (SBAC)
:SBAC
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SBA Communications
(NASDAQ:SBAC)
74Outperform
Positive Factors
Financial Performance
SBAC reported upside 1Q25 site development revenue and raised its 2025 site development revenue guidance by $20MM.
Revenue Growth
The growing domestic leasing backlog should increase confidence in US organic revenue growth picking up.
Share Repurchase
The Board authorizing a new $1.5bn share repurchase plan reflects confidence in business growth.
Negative Factors
Churn Challenges
Elevated international churn, particularly in Brazil, due to customer consolidation will continue to present a headwind to results.
FX Impact
FX headwinds are expected to have a $25 million negative impact on site leasing revenue in 2025.
Growth Limitations
AFFO/share growth is still expected to remain subdued into 2027.
SBA Communications (SBAC) vs. S&P 500 (SPY)
Market Cap
$26.00B
Dividend Yield1.68%
Average Volume (3M)1.15M
Price to Earnings (P/E)33.2
Beta (1Y)0.34
Revenue Growth-0.29%
EPS Growth42.59%
CountryUS
Employees1,720
SectorReal Estate
Sector Strength76
IndustryREIT - Specialty
Share Statistics
EPS (TTM)7.28
Shares Outstanding107,451,775
10 Day Avg. Volume1,094,235
30 Day Avg. Volume1,148,346
Financial Highlights & Ratios
PEG Ratio0.78
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.46
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit18.04
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$249.54Price Target Upside3.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
SBA Communications Business Overview & Revenue Model
Company DescriptionSBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure, primarily consisting of towers and rooftops. The company operates in the real estate investment trust (REIT) sector, providing shared site space for wireless service providers to install their antennas and other equipment. SBA Communications plays a critical role in facilitating the deployment of advanced wireless networks, including 5G, by offering infrastructure solutions that enhance network coverage and capacity.
How the Company Makes MoneySBA Communications makes money primarily through leasing antenna space on its towers and other wireless infrastructure to wireless service providers, broadcasters, and other companies. The company generates recurring revenue by entering into long-term lease agreements with these tenants, which often include built-in rent escalations over time. Additionally, SBA Communications expands its revenue streams by building new towers and acquiring existing ones, thereby increasing its portfolio of rentable sites. Key factors contributing to its earnings include strategic partnerships with major wireless carriers, ongoing demand for network expansion and upgrades, and its ability to adapt to the evolving technological landscape of the telecommunications industry.
SBA Communications Financial Statement Overview
Summary
SBA Communications exhibits strong revenue and profit growth along with solid cash flow generation. However, high leverage and negative equity present significant risks to financial stability. Continued focus on debt management and operational efficiencies is essential 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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.68B | 2.71B | 2.63B | 2.31B | 2.08B | Gross Profit |
| 2.10B | 2.08B | 1.96B | 1.76B | 1.61B | EBIT |
| 1.44B | 923.66M | 925.41M | 782.50M | 451.14M | EBITDA |
| 1.84B | 1.70B | 1.68B | 1.51B | 1.39B | Net Income Common Stockholders |
| 749.54M | 501.81M | 461.43M | 237.62M | 24.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 189.84M | 209.59M | 143.71M | 367.28M | 308.56M | Total Assets |
| 11.42B | 10.18B | 10.59B | 9.80B | 9.16B | Total Debt |
| 15.76B | 14.46B | 15.17B | 14.52B | 13.43B | Net Debt |
| 15.57B | 14.25B | 15.03B | 14.16B | 13.12B | Total Liabilities |
| 16.47B | 15.31B | 15.83B | 15.07B | 13.97B | Stockholders Equity |
| -5.11B | -5.17B | -5.28B | -5.28B | -4.82B |
| Cash Flow | Free Cash Flow | |||
| 1.11B | 1.31B | 1.10B | 1.06B | 997.47M | Operating Cash Flow |
| 1.33B | 1.54B | 1.32B | 1.19B | 1.13B | Investing Cash Flow |
| -809.31M | -468.25M | -1.39B | -1.42B | -446.37M | Financing Cash Flow |
| 645.74M | -1.02B | -167.47M | 339.26M | -469.02M |
SBA Communications Technical Analysis
Positive
241.96
Price Trends
221.23
Positive
212.20
Positive
219.23
Positive
Market Momentum
5.55
Negative
65.71
Neutral
91.32
Negative
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 241.96 is above the 20-day moving average (MA) of 225.22, above the 50-day MA of 221.23, and above the 200-day MA of 219.23, indicating a bullish trend. The MACD of 5.55 indicates Negative momentum. The RSI at 65.71 is Neutral, neither overbought nor oversold. The STOCH value of 91.32 is Negative, 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 0 New Risks
SBA Communications Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $85.67B | 102.98 | 7.08% | 1.99% | 6.36% | -3.54% | |
74 Outperform | $26.00B | 33.22 | -14.67% | 1.68% | -0.29% | 42.59% | |
73 Outperform | $104.68B | 57.38 | 80.05% | 2.93% | -6.05% | -11.75% | |
69 Neutral | $28.25B | 157.45 | -35.81% | 2.99% | 11.04% | -37.29% | |
64 Neutral | $1.21B | 12.89 | -3.72% | 12.10% | 1.49% | ― | |
60 Neutral | $2.79B | 11.37 | 0.20% | 8519.74% | 6.07% | -14.95% | |
55 Neutral | $46.53B | 33.81 | -198.54% | 5.86% | -12.57% | -375.80% |
* Real Estate Sector Average
Performance Comparison
SBAC
SBA Communications
241.96
53.01
28.06%
AMT
American Tower
223.60
50.63
29.27%
CCI
Crown Castle
106.87
16.68
18.49%
EQIX
Equinix
875.85
196.15
28.86%
IRM
Iron Mountain
95.76
21.16
28.36%
UNIT
Uniti Group
4.96
1.34
37.02%
SBA Communications Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 8.37%|
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.