Short Report on SBA Communications Stock

Now trading at a price of $224.71, SBA Communications has moved -2.5% so far today.

SBA Communications returned losses of -24.0% last year, with its stock price reaching a high of $356.59 and a low of $218.61. Over the same period, the stock underperformed the S&P 500 index by -41.0%. As of April 2023, the company's 50-day average price was $240.6. SBA Communications Corporation is a leading independent owner and operator of wireless communications infrastructure including towers, buildings, rooftops, distributed antenna systems (DAS) and small cells. Based in Boca Raton, FL, the large-cap Real Estate company has 1,834 full time employees. SBA Communications has offered a 1.3% 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) $2,015 $2,083 $2,309 $2,633
Operating Margins 31.4% 33.1% 36.5% 37.8%
Net Margins 7.3% 1.16% 10.29% 17.52%
Net Income (MM) $147 $24 $238 $461
Net Interest Expense (MM) -410 -410 -416 -410
Net Interest Expense (MM) -$410 -$410 -$416 -$410
Depreciation & Amort. (MM) -$697 -$722 -$700 -$708
Earnings Per Share $1.28 $0.21 $2.14 $3.44
EPS Growth n/a -83.59% 919.05% 60.75%
Diluted Shares (MM) 115 113 111 108
Free Cash Flow (MM) $831 $997 $1,056 $1,103
Capital Expenditures (MM) -$154 -$129 -$134 -$214
Net Current Assets (MM) -$13,077 -$13,494 -$14,453 -$15,347
Current Ratio 0.32 0.77 1.0 0.69
Long Term Debt (MM) $9,812 $11,072 $12,279 $12,844
Net Debt / EBITDA 8.09 9.89 8.89 7.9

SBA Communications has growing revenues and increasing reinvestment in the business and strong margins with a stable trend. Additionally, the company's financial statements display exceptional EPS growth and a steady stream of strong cash flows. However, the firm has a highly leveraged balance sheet.

SBA Communications Has Elevated P/B and P/E Ratios:

SBA Communications has a trailing twelve month P/E ratio of 69.9, compared to an average of 24.81 for the Real Estate sector. Based on its EPS guidance of $5.75, the company has a forward P/E ratio of 41.8. SBA Communications's PEG ratio is 6.37 on the basis of the 11.0% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued.

SBA Communications Has an Analyst Consensus of Strong Upside Potential:

The 15 analysts following SBA Communications have set target prices ranging from $262.0 to $344.0 per share, for an average of $310.87 with a buy rating. As of April 2023, the company is trading -22.6% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

SBA Communications has a very low short interest because 1.3% of the company's shares are sold short. Institutions own 96.7% of the company's shares, and the insider ownership rate stands at 1.23%, suggesting a large amount of insider shareholders. The largest shareholder is the Vanguard Group, Inc., whose 16% stake in the company is worth $3,941,710,584.

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.