With a market cap of $97.5 billion, American Tower Corporation (AMT) is a global leader in communications real estate and one of the largest real estate investment trusts (REITs). With a portfolio of over 148,000 communications sites worldwide, the company provides leasing solutions for towers, in-building systems, outdoor distributed antenna systems, and managed rooftops.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and American Tower fits this criterion perfectly, exceeding the mark. American Tower operates a highly interconnected footprint of U.S. data center facilities to support network expansion.
Despite this, the wireless communications infrastructure company has experienced a 15.2% dip from its 52-week high of $243.56 achieved on Sept. 10, 2024. AMT saw a marginal decrease in its share price over the past three months, outperforming the Real Estate Select Sector SPDR Fund’s (XLRE) decline of 2.9% during the same period.
Longer term, American Tower’s shares have soared 12.2% on a YTD basis, surpassing XLRE's 4.5% gain. However, AMT's shares have decreased marginally over the past 52 weeks, lagging behind XLRE's 7% return over the same time frame.
Despite recent fluctuations, American Tower's stock has been trading below its 50-day moving average since October last year and has remained below its 200-day moving average since November last year.
Despite American Tower’s Q4 2024 FFO of $2.32 per share slightly falling short of the analyst estimate, the stock surged 6.1% on Feb. 25. Revenue grew 3.7% year-over-year to $2.6 billion, exceeding expectations, while net income and EPS saw a significant boost from lower operating expenses. A 20% drop in operating expenses, primarily from lower depreciation and amortization costs. Additionally, free cash flow increased 22% to $746 million, and the growing data center segment, driven by AI demand, reinforced investor confidence.
In comparison, its rival, Equinix, Inc. (EQIX) has underperformed AMT, with shares of Equinix declining 4.8% on a YTD basis. Also, EQIX has dipped marginally over the past 52 weeks.
Despite AMT’s underperformance over the past year, analysts are bullish, with a consensus rating of "Strong Buy" from 23 analysts. It is currently trading below the mean price target of $226.25.
