Valued at a market cap of $23.7 billion, SBA Communications Corporation (SBAC) is an independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS), and small cells. The Boca Raton, Florida-based company generates revenues from two primary businesses, site leasing and site development services.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and SBAC fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the REIT - specialty industry. The company benefits from the growing demand for 5G deployment and mobile data consumption, making its infrastructure increasingly valuable to telecom providers. Its asset-light business model and ability to secure long-term lease agreements with major wireless carriers such as AT&T Inc. (T) and Verizon Communications Inc. (VZ) further strengthen its competitive position in the industry.
This REIT is currently trading 12.8% below its 52-week high of $252.64, reached on Oct. 16, 2024. Shares of SBAC have surged 8.2% over the past three months, outpacing the broader Dow Jones Industrial Average’s ($DOWI) 1.3% fall during the same time frame.
However, in the longer term, SBAC has gained 3% over the past 52 weeks, lagging behind DOWI’s 6.1% uptick over the same time frame. Moreover, on a six-month basis, shares of SBAC are down 9.2%, compared to DOWI’s marginal decline.
To confirm its recent bullish trend, SBAC has been trading above its 200-day moving average since late February, with slight fluctuations, and has remained above its 50-day moving average since early February.
SBAC released its Q4 earnings results on Feb. 24. Shares of the company closed up 3% the following day as it delivered a better-than-expected performance. Its AFFO of $3.47 per share advanced 3% from the year-ago quarter and surpassed the consensus estimate of $3.37. Moreover, robust growth in its site leasing and development revenues led to a 2.8% increase in its total revenue to $693.7 million, which also exceeded Wall Street forecasts by 1.8%. A key highlight of the quarter was the 33.1% decline in its operating expenses, which contributed to an 82.3% year-over-year surge in its operating income, reaching $382.3 million.
Additionally, SBAC ended 2024 with its highest backlog of the year for both leasing and services, positioning it well for continued growth in 2025. Looking ahead, for fiscal 2025, the company projects AFFO per share to range between $12.40 and $12.76.
SBAC has outpaced its rival, Crown Castle Inc.’s (CCI) marginal gain over the past 52 weeks and 12.2% decline on a six-month basis.
Looking at SBAC’s recent outperformance relative to the Dow, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 19 analysts covering it, and the mean price target of $248.56 suggests a 12.8% premium to its current levels.
