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What Awaits SBA Communications (SBAC) This Earnings Season?
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SBA Communications Corporation (SBAC - Free Report) is scheduled to report third-quarter 2022 results on Oct 31, after market close. Results are expected to reflect year-over-year growth in quarterly revenues and funds from operations (FFO) per share.
This Boca Raton, FL-based communications tower REIT delivered a surprise of 3.02% in terms of adjusted FFO (AFFO) per share in the last reported quarter. Results reflected a robust operating performance in the site-leasing and development businesses, both on the domestic and international front. SBA Communications continued to benefit from the addition of sites to its portfolio.
Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on each occasion, the average beat being 2.20%. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
The advancement in mobile technology, such as the 5G network, and the proliferation of bandwidth-intensive applications have driven the growth in mobile data usage globally. Also, rampant usage of network-intensive applications for video conferencing and cloud services, and remote-working scenarios have fueled the rise.
This has resulted in wireless service providers and carriers expanding their networks and deploying additional equipment for existing networks to boost their network coverage and capacity to meet the rising consumer demand.
This upbeat trend is likely to have driven the demand for SBA Communications’ portfolio of wireless communications infrastructure during third-quarter 2022, aiding its top-line performance.
Moreover, SBAC has a resilient and stable site-leasing business model. It generates most of its revenues from long-term (typically 5-10 year) tower leases that have built-in rent escalators. This is likely to have supported stable site-leasing revenues for the company in the to-be-reported quarter.
The consensus estimate for third-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $578 million, indicating an increase of 7.8% from the year-ago quarter’s $536 million.
We believe that to capitalize on the strong secular growth trends of the wireless industry, SBAC is likely to have continued with its asset base expansion with the addition of sites to its portfolio through acquisitions and developments during the quarter.
Also, its solid balance-sheet strength is expected to have aided its efforts for 5G deployment.
The Zacks Consensus Estimate for third-quarter site-development revenues is pegged at $70 million, suggesting growth of 29.6% from $54 million reported in the year-ago period.
The Zacks Consensus Estimate for third-quarter total revenues is pegged at $652.8 million, implying year-over-year growth of 10.8%.
SBA Communications’ activities during the quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for quarterly FFO per share has been revised a cent upward to $3.04 over the past month. Also, it suggests year-over-year growth of 12.2%.
Earning Whispers
SBA Communications has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Earnings ESP: SBAC has an Earnings ESP of +0.44 %. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Extra Space Storage (EXR - Free Report) is scheduled to report quarterly figures on Nov 1. EXR has an Earnings ESP of +1.31% and a Zacks Rank of 3 presently.
Public Storage (PSA - Free Report) is slated to report quarterly numbers on Nov 1. PSA has an Earnings ESP of +1.34% and carries a Zacks Rank of 3.
Host Hotels & Resorts (HST - Free Report) is scheduled to report quarterly figures on Nov 2. HST has an Earnings ESP of +0.71% and a Zacks Rank of 3 currently.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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What Awaits SBA Communications (SBAC) This Earnings Season?
SBA Communications Corporation (SBAC - Free Report) is scheduled to report third-quarter 2022 results on Oct 31, after market close. Results are expected to reflect year-over-year growth in quarterly revenues and funds from operations (FFO) per share.
This Boca Raton, FL-based communications tower REIT delivered a surprise of 3.02% in terms of adjusted FFO (AFFO) per share in the last reported quarter. Results reflected a robust operating performance in the site-leasing and development businesses, both on the domestic and international front. SBA Communications continued to benefit from the addition of sites to its portfolio.
Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on each occasion, the average beat being 2.20%. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
SBA Communications Corporation price-eps-surprise | SBA Communications Corporation Quote
Factors at Play
The advancement in mobile technology, such as the 5G network, and the proliferation of bandwidth-intensive applications have driven the growth in mobile data usage globally. Also, rampant usage of network-intensive applications for video conferencing and cloud services, and remote-working scenarios have fueled the rise.
This has resulted in wireless service providers and carriers expanding their networks and deploying additional equipment for existing networks to boost their network coverage and capacity to meet the rising consumer demand.
This upbeat trend is likely to have driven the demand for SBA Communications’ portfolio of wireless communications infrastructure during third-quarter 2022, aiding its top-line performance.
Moreover, SBAC has a resilient and stable site-leasing business model. It generates most of its revenues from long-term (typically 5-10 year) tower leases that have built-in rent escalators. This is likely to have supported stable site-leasing revenues for the company in the to-be-reported quarter.
The consensus estimate for third-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $578 million, indicating an increase of 7.8% from the year-ago quarter’s $536 million.
We believe that to capitalize on the strong secular growth trends of the wireless industry, SBAC is likely to have continued with its asset base expansion with the addition of sites to its portfolio through acquisitions and developments during the quarter.
Also, its solid balance-sheet strength is expected to have aided its efforts for 5G deployment.
The Zacks Consensus Estimate for third-quarter site-development revenues is pegged at $70 million, suggesting growth of 29.6% from $54 million reported in the year-ago period.
The Zacks Consensus Estimate for third-quarter total revenues is pegged at $652.8 million, implying year-over-year growth of 10.8%.
SBA Communications’ activities during the quarter were adequate to gain analysts’ confidence. The Zacks Consensus Estimate for quarterly FFO per share has been revised a cent upward to $3.04 over the past month. Also, it suggests year-over-year growth of 12.2%.
Earning Whispers
SBA Communications has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.
Earnings ESP: SBAC has an Earnings ESP of +0.44 %. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: SBA Communications currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks That Warrant a Look
Here are some other stocks that are worth considering from the REIT sector, as our model shows that these have the right combination of elements to deliver a surprise this reporting cycle:
Extra Space Storage (EXR - Free Report) is scheduled to report quarterly figures on Nov 1. EXR has an Earnings ESP of +1.31% and a Zacks Rank of 3 presently.
Public Storage (PSA - Free Report) is slated to report quarterly numbers on Nov 1. PSA has an Earnings ESP of +1.34% and carries a Zacks Rank of 3.
Host Hotels & Resorts (HST - Free Report) is scheduled to report quarterly figures on Nov 2. HST has an Earnings ESP of +0.71% and a Zacks Rank of 3 currently.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.