Valued at a market cap of $20.3 billion, SBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure. The Boca Raton, Florida-based company primarily generates revenue by leasing antenna space on its extensive portfolio of cell towers, rooftops, small cells, and distributed antenna systems to major wireless carriers under long-term contracts, while also providing site development, construction, and maintenance services.
Companies valued at $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 steady demand for mobile connectivity and network densification driven by 5G. Its business model of multi-tenant tower leasing provides stable, recurring cash flows and positions the company as a critical enabler of global wireless network expansion.
This specialty REIT has slipped 22.8% below its 52-week high of $245.16, reached on May 6. Shares of SBAC have declined 1.1% over the past three months, underperforming the S&P 500 Index’s ($SPX) 5% rise during the same time frame.
In the longer term, SBAC has fallen 15.2% over the past 52 weeks, lagging behind SPX’s 13% uptick over the same time frame. Moreover, on a YTD basis, shares of SBAC are down 7.1%, compared to SPX’s 16.3% return.
To confirm its bearish trend, SBAC has been trading below its 200-day moving average since late August and has remained below its 50-day moving average since late July, with slight fluctuations.
SBAC posted better-than-expected Q3 earnings results on Nov. 3, and its shares surged 1.4% in the following trading session. The company’s total revenue improved 9.7% year-over-year to $732.3 million, surpassing consensus estimates by 3.9%. Higher site leasing and site development revenues contributed to its topline rise. Moreover, while its AFFO per share declined marginally from the same period last year to $3.30, it handily topped analyst expectations of $3.19.
SBAC has also lagged behind its rival, American Tower Corporation (AMT), which declined 14.1% over the past 52 weeks and 2.1% on a YTD basis.
Despite SBAC’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 20 analysts covering it, and the mean price target of $224.78 suggests an 18.7% premium to its current price levels.
