Scotiabank has begun covering SBA Communications (SBAC, Financial), assigning a Sector Perform rating and setting a target price of $252. Analyst Maher Yaghi recognizes that the stock seems undervalued based on its EV/EBITDA comparison with peers in the telecommunications infrastructure sector. However, the analyst points out several short-term obstacles, urging caution. The focus is expected to remain on the intensity of near-term AFFO per share and organic growth challenges.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 16 analysts, the average target price for SBA Communications Corp (SBAC, Financial) is $256.81 with a high estimate of $285.00 and a low estimate of $225.00. The average target implies an upside of 9.80% from the current price of $233.89. More detailed estimate data can be found on the SBA Communications Corp (SBAC) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, SBA Communications Corp's (SBAC, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for SBA Communications Corp (SBAC, Financial) in one year is $241.66, suggesting a upside of 3.32% from the current price of $233.89. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the SBA Communications Corp (SBAC) Summary page.
SBAC Key Business Developments
Release Date: April 28, 2025
- Domestic Organic Leasing Revenue Growth: 5.2% gross, 1% net, including 4.2% churn.
- International Organic Leasing Revenue Growth: 1.6% net, 7.2% gross, including 5.6% churn.
- First Quarter Churn: $20 million related to Sprint consolidation.
- Site Acquisitions: 344 sites acquired for $58 million, primarily in Nicaragua.
- New Sites Built: 67 new sites, mostly outside the US.
- Share Repurchase: 583,000 shares repurchased for $123 million at an average price of $210.87 per share.
- New Share Repurchase Plan: $1.5 billion authorized, replacing the prior plan.
- Quarterly Dividend: $1.11 per share, a 13% increase over the previous year.
- Total Debt: $12.5 billion, with $11.8 billion net debt.
- Net Debt to Adjusted EBITDA Ratio: 6.4 times.
- Weighted Average Interest Rate: 3.7% across outstanding debt.
- Cash Dividend Paid: $122.3 million or $1.11 per share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SBA Communications Corp (SBAC, Financial) reported a strong start to 2025 with results broadly in line with estimates and a healthy level of growth in activity levels.
- The company experienced its best quarter in several years for new domestic leasing business, with a significant increase in leasing backlog.
- SBA Communications Corp (SBAC) increased its full-year outlook for services due to strong performance and growing backlog.
- The company completed its exit from the Philippines and Colombia, allowing for improved focus and resource allocation.
- SBA Communications Corp (SBAC) announced a new $1.5 billion share repurchase plan, demonstrating confidence in the company's future and commitment to returning value to shareholders.
Negative Points
- The company experienced a 4.2% churn in the first quarter, with $20 million related to the Sprint consolidation, which is expected to be $50 million to $52 million for the full year 2025.
- International churn remained elevated due to key area consolidation, impacting growth in some markets.
- The company faces challenges in the international markets, particularly in Brazil, due to ongoing consolidation impacts and rationalization needs.
- SBA Communications Corp (SBAC) noted that private valuations for US tower assets remain much higher than public valuations, making acquisitions challenging.
- The company is experiencing a negative straight-line revenue trend, which may indicate a maturing portfolio and potential impacts on future results.
