How Smart Investors Look at American Tower (AMT).

American Tower logged a -0.1% change during today's morning session, and is now trading at a price of $188.38 per share.

American Tower returned losses of -29.1% last year, with its stock price reaching a high of $282.47 and a low of $178.17. Over the same period, the stock underperformed the S&P 500 index by -32.0%. As of April 2023, the company's 50-day average price was $197.76. American Tower, one of the largest global REITs, is a leading independent owner, operator and developer of multitenant communications real estate with a portfolio of nearly 226,000 communications sites and a highly interconnected footprint of U. Based in Boston, MA, the large-cap Real Estate company has 6,391 full time employees. American Tower has offered a 3.2% dividend yield over the last 12 months.

Exceptional Profitability Overshadowed by Excessive Leverage:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $7,580 $8,042 $9,357 $10,711
Operating Margins 35.5% 35.9% 33.5% 22.0%
Net Margins 24.9% 21.02% 27.44% 16.49%
Net Income (MM) $1,888 $1,691 $2,568 $1,766
Net Interest Income -$767,400 -$753,800 -$830,500 -$1,064,900
Depreciation & Amort. -$1,795,800 -$1,871,400 -$2,332,600 -$3,355,100
Earnings Per Share $4.24 $3.79 $5.66 $2.98
EPS Growth n/a -10.61% 49.34% -47.35%
Diluted Shares (MM) 446 446 453 466
Free Cash Flow (MM) $2,761 $2,850 $3,443 $1,823
Capital Expenditures (MM) -$991 -$1,032 -$1,377 -$1,874
Net Current Assets (MM) -$33,661 -$39,547 -$57,089 -$51,164
Current Ratio 0.47 0.79 0.41 0.44
Long Term Debt (MM) $21,127 $28,498 $38,686 $34,156
Net Debt / EBITDA 5.18 6.32 7.01 6.03

American Tower has growing revenues and increasing reinvestment in the business, strong margins with a negative growth trend, and consistent free cash flow. However, the firm suffers from declining EPS growth and a highly leveraged balance sheet.

American Tower's P/B and P/E Ratios Are Higher Than Average:

American Tower has a trailing twelve month P/E ratio of 66.4, compared to an average of 24.81 for the Real Estate sector. Based on its EPS guidance of $4.92, the company has a forward P/E ratio of 40.2. The 3.0% compound average growth rate of American Tower's historical and projected earnings per share yields a PEG ratio of 21.98. This suggests that these shares are overvalued. Furthermore, American Tower is likely overvalued compared to the book value of its equity, since its P/B ratio of 16.24 is higher than the sector average of 2.24. The company's shares are currently trading 471.0% above their Graham number.

There's an Analyst Consensus of Strong Upside Potential for American Tower:

The 15 analysts following American Tower have set target prices ranging from $213.0 to $271.0 per share, for an average of $241.13 with a buy rating. As of April 2023, the company is trading -18.0% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

American Tower has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 93.2% of the company's shares, and the insider ownership rate stands at 0.15%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 13% stake in the company is worth $11,614,720,846.

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.