Market Watch: Anticipation Grows for SBA Communications’ Q3 Earnings
With a market cap of $26.4 billion, SBA Communications Corporation (SBAC) is a key player in the wireless communications infrastructure industry. The company owns and manages over 39,000 sites, including towers and distributed antenna systems (DAS), predominantly leasing antenna space to wireless service providers under long-term contracts. SBAC is scheduled to announce its fiscal Q3 earnings after the market closes on Monday, Oct. 28.
Analysts Predict a Decline in AFFO
Ahead of their earnings release, analysts anticipate that SBAC will report an AFFO of $3.17 per share, marking a decrease of 5.1% from $3.34 per share in the same quarter last year. Notably, the company has a strong history of consistently exceeding Wall Street’s earnings estimates over the past four quarters. In its most recent quarter, SBAC surpassed consensus AFFO estimates by 5.5%.
Looking forward to fiscal 2024, analysts project SBAC will report an AFFO of $12.52 per share—a decline of 5% from $13.18 per share in fiscal 2023.
SBA Communications’ Performance Relative to the Market
Over the past year, SBA Communications surged 24.1%, which lags behind the 39.5% gain of the broader S&P 500 Index ($SPX) and the 38.3% returns of the Real Estate Select Sector SPDR Fund (XLRE) during the same period.
After Mixed Earnings, Optimism Remains
Despite missing revenue estimates for Q2 on July 29, shares of SBA Communications rose slightly the following day. The company reported an adjusted funds from operations (AFFO) of $3.29 per share, reflecting a modest year-over-year increase of 1.5%. They highlighted a balanced capital allocation strategy that included portfolio expansion and stock buybacks, reassuring investors about their direction. Although overall revenue decreased and guidance was lowered, the growth in domestic site leasing revenue and positive signs from international leasing provided a glimmer of hope.
Analysts’ Outlook for SBA Communications Stock
The consensus among analysts regarding SBA Communications stock is cautiously optimistic, with an overall “Moderate Buy” rating. Out of 17 analysts, 10 recommend a “Strong Buy,” two endorse a “Moderate Buy,” and five suggest a “Hold.” Currently, SBAC is trading below the average analyst price target of $252.76.
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On the date of publication, Sohini Mondal 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.
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