How Smart Investors Look at American Tower (AMT).

American Tower logged a -0.2% change during today's afternoon session, and is now trading at a price of $210.54 per share. The S&P 500 index moved -0.4% and the Nasdaq posted a -1.4% change. AMT's trading volume is 655,608 compared to the stock's average volume of 2,115,987.

Over the last 52 weeks, the stock moved -26.4%, with a high of $294.4 and a low of $178.17. During this time, the stock lagged the S&P 500 index by -6.7%. American Tower Corporation, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of approximately 219,000 communications sites. The large-cap Real Estate company has 6,378 full time employees and is based in Boston, MA. American Tower has returned a 2.7% dividend yield over the last 12 months.

AMT's Strong Earnings Come at the Price of Excessive Leverage:

2018-12-31 2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $7,440 $7,580 $8,042 $9,357
Revenue Growth n/a 1.9% 6.1% 16.4%
Operating Margins 25.6% 35.47% 38.89% 35.57%
Operating Margins Growth n/a 38.55% 9.64% -8.54%
Net Margins 16.62% 24.9% 21.02% 27.44%
Net Margins Growth n/a 49.82% -15.58% 30.54%
Earnings Per Share $2.77 $4.24 $3.79 $5.66
EPS Growth n/a 53.07% -10.61% 49.34%
Free Cash Flow (MM) $2,835 $2,761 $2,850 $3,443
FCF Growth n/a -2.6% 3.2% 20.83%
Capital Expenditures (MM) $-913 $-991 $-1,032 $-1,377
Net Debt / EBITDA 4.87 5.09 5.59 6.16

Basic Valuation Metrics Show American tower Is Overvalued:

Compared to the Real Estate sector's average of 27.16, American Tower has a trailing twelve month price to earnings (P/E) ratio of 33.5 and, based on its Eps guidance of 4.64, an expected P/E ratio of 45.4.

The firm's price to earnings growth (PEG) is 223.4, which indicates that it is overvalued in terms of its expected rate of earnings growth. . American Tower's price to book (P/B) ratio is 15.6 compared to its sector average of 2.39.

As of the date of publication, the company is trading 381.8% above its fair value as expressed by Benjamin Graham's formula. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 6.29 * 13.492) = $43.7

There is Mixed market sentiment About American Tower:

17 analysts are following American Tower and have set target prices ranging from $215 to $280 per share. On average, they have given the company a rating of buy. At today's prices, AMT is trading -15.63% away from its average analyst target price of $249.53 per share, implying an analyst consensus of some upside potential for the stock. The company has a very low short interest since 0.9% of the company's shares are tied to short positions. Institutions own 93.0% of American Tower's shares, while the insider ownership rate stands at 0.2%. The biggest shareholder is the Vanguard Group, Inc. with a 13.04% stake in the company worth approximately $12,784,128,190.00.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.