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SBA Communications Corp Class A SBAC

Morningstar Rating
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Stock XNAS Rating as of
$189.12 +3.00 (1.61%)
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As of Delayed Price Post-Trading: $180.34 −8.78
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Company Report

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SBA Earnings: Softness in First Quarter Likely to Carry Through 2024; Capital Allocation Looks Good

Matthew Dolgin

SBA Communications' underwhelming first-quarter leasing results were generally consistent with the tepid 2024 outlook the firm provided last quarter. Management slightly reduced the leasing outlook further, though we attribute that to slightly higher Oi churn in Brazil following a recent judicial resolution and the strong US dollar rather than weaker demand. We believe we are in a lull for carrier tower investment rather than a new long-term norm. As SBA manages the difficult macroeconomic environment, we applaud its timing of share repurchases while still bringing down debt. We’re maintaining our $250 fair value estimate.

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Price vs Fair Value

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SBAC is trading within a range we consider fairly valued.
Price
$186.12
Fair Value
$125.00
Uncertainty
Medium
1-Star Price
$656.40
5-Star Price
$257.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Carrier investment in towers will have to continue as mobile data usage continues to grow rapidly. Greater use of the Internet of Things, 5G, and video content should keep this trend in place for years to come.

Bears

High financial leverage could become problematic if the company were to face an industry downturn or a less favorable economic environment.

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Trading Information

Previous Close Price
$186.12
Day Range
$183.64–194.53
52-Week Range
$183.64–263.08
Bid/Ask
$180.00 / $193.79
Market Cap
$20.40 Bil
Volume/Avg
1.7 Mil / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
35.85
Price/Sales
7.51
Dividend Yield (Trailing)
1.90%
Dividend Yield (Forward)
2.11%
Total Yield
2.92%

Company Profile

SBA Communications owns and operates almost 40,000 cell towers throughout North America, South America, and Africa. It leases space on its towers to wireless service providers, who install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company owns more than 17,000 towers in the U.S., which accounted for about 70% of the company’s total revenue in 2023. Internationally, SBA’s greatest presence is in Brazil, where it operates roughly 10,000 towers. SBA operates as a real estate investment trust, or REIT.
Sector
Real Estate
Industry
REIT - Specialty
Stock Style Box
Mid Growth
Total Number of Employees
1,787
Website
https://www.sbasite.com

Competitors

Valuation

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Metric
SBAC
AMT
CLNX
Price/Earnings (Normalized)
 35.8529.85—
Price/Book Value
 —19.791.57
Price/Sales
 7.517.155.52
Price/Cash Flow
 13.5714.1310.13
Price/Earnings
SBAC
AMT
CLNX

Financial Strength

Metric
SBAC
AMT
CLNX
Quick Ratio
 0.300.530.69
Current Ratio
 0.360.630.69
Interest Coverage
 2.222.420.49
Quick Ratio
SBAC
AMT
CLNX

Profitability

Metric
SBAC
AMT
CLNX
Return on Assets (Normalized)
 8.37%4.32%−0.51%
Return on Equity (Normalized)
 —61.42%−1.60%
Return on Invested Capital (Normalized)
 12.89%6.85%0.81%
Return on Assets
SBAC
AMT
CLNX
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REIT - Specialty Industry Comparables

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Name
Morningstar Rating for Stocks
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Economic Moat
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DLR
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CCI
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IRM
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WY
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LAMR
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RYN
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UNIT
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