A month has gone by since the last earnings report for American Tower (
AMT Quick Quote AMT - Free Report) . Shares have added about 6.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Tower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Tower Q4 AFFO Lags Estimates, '21 View Strong
American Tower reported fourth-quarter 2020 AFFO per share of $2.07, missing the Zacks Consensus Estimate of $2.08. Nonetheless, the reported figure improved 6.2% year over year.
The company generated total revenues of $2.12 billion, which outpaced the Zacks Consensus Estimate of $2.06 billion. Moreover, the figure improved 10.3% year over year. Declining revenues in the Asia Pacific and Latin America property segments hindered results. Nonetheless, the company witnessed strong organic tenant billing growth. For 2020, American Tower reported AFFO per share of $8.44, up 9.2% year over year. Also, the figure met the Zacks Consensus Estimate. Total revenues of $8 billion increased 6.1% year over year. Quarter in Detail
Adjusted EBITDA in the reported quarter was $1.38 billion, up 13% from the prior-year quarter. Adjusted EBITDA margin was 64.8% in the fourth quarter of 2020. Operating income was $674.3 million, up 2% from the year-ago quarter’s figure.
In the fourth quarter, the company spent $3.5 billion to acquire 2,629 communication sites, primarily in the United States and Canada. Property Segment
Quarterly revenues grossed $2.1 billion, up 10% year over year. Operating profit was $1.4 billion and operating profit margin was 67% in fourth-quarter 2020.
In the Property segment, revenues from the United States totaled $1,217 million, up 10.7% year over year. Further, total international revenues amounted to $882 million, up 9% year over year. Within this, revenues from the Asia Pacific totaled $276 million, declining 6.2 % year over year, while Latin America revenues totaled $326 million, down 1.4% year over year. Africa revenues grossed $239 million, up 58.8% year over year, while Europe revenues of $42 million improved 21.9% from the year-ago period. Services Segment
Quarterly revenues totaled $22.9 million, up 50% year over year. Operating profit was $9 million and operating profit margin was 38% during the December-end quarter.
Cash Flow and Liquidity
In the fourth quarter of 2020, American Tower generated $1.1 billion of cash from operating activities, rising 13.9% year over year. Free cash flow during the period was $758 million, up 5.5% year over year.
At the end of the fourth quarter, the company had $4.9 billion of total liquidity. This comprised $1.7 billion in cash and cash equivalents, and availability of $3.2 billion under its revolving credit facilities (net of any outstanding letters of credit). Share Repurchases
During the year, American Tower repurchased 0.3 million shares of its common stock for around $56 million. As of Dec 31, 2020, it had nearly $2 billion remaining under the existing stock repurchase programs.
For 2021, American Tower anticipates total property revenues of $8,500-$8,650 million, suggesting a year-over-year improvement of 7.8% at the mid-point. Adjusted EBITDA is projected at $5,590-$5,690 million, indicating a mid-point increase of 9.4% from the prior year. Consolidated AFFO is estimated to be $4,060-$4,160 million, suggesting a year-over-year mid-point expansion of 8.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
Currently, American Tower has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise American Tower has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.