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SBAC Stock Rises 12% Year to Date: Will the Trend Continue?
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Shares of SBA Communications (SBAC - Free Report) have rallied 12% year to date, outperforming the industry's upside of 0.9%.
Last month, this tower REIT reported first-quarter 2025 adjusted funds from operations (AFFO) per share of $3.18, beating the Zacks Consensus Estimate of $3.12. However, the figure implies a drop of 3.3% from the prior-year quarter. Results reflected a significant improvement in site-development revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised marginally northward to $12.72 over the past week.
Image Source: Zacks Investment Research
Factors Behind SBAC Stock Price Rise: Will This Trend Last?
The advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. With increasing smartphone adoption, greater broadband demand and plans for 5G service worldwide, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. SBA Communications’ portfolio of extensive infrastructure assets is well-poised to capitalize on this upbeat trend.
SBA Communications has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive. The company also offers wireless service providers assistance in developing and maintaining their networks. Given the vast array of services the company offers due to its extensive site development experience, it is likely to propel its growth over the long term.
SBA Communications continues to expand its business into domestic and select international markets with high-growth characteristics. In the first quarter, SBAC acquired 344 communication sites, including Milicom’s 321 sites, for a total cash consideration of $58 million. The company also built 67 towers during this period. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth worldwide.
SBA Communications’ dividend hikes and share buybacks demonstrate its commitment to driving shareholder value and superior capital-distribution ability. In February 2025, the REIT announced a quarterly cash dividend of $1.11 per share on its Class A common stock, indicating an increase of nearly 13% from the prior quarter. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 19.97%. Given SBA Communications’ solid operating platform, decent financial position and a lower-than-industry dividend payout rate, the dividend distribution is expected to be sustainable over the long run.
Also, the company has $1.5 billion of authorization remaining under its stock buyback plan as of April 28. 2025. Following the first quarter of 2025, SBA Communications repurchased 583,000 shares of its Class A common stock for an aggregate amount of $122.9 million under its $1 billion stock repurchase plan. Such efforts boost shareholders’ confidence in the stock.
Key Risks for SBAC
High customer concentration and the ongoing consolidation in the wireless industry are concerns for SBA Communications’ top-line growth. Elevated interest rates add to the company’s woes.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share is pegged at $2.34, implying year-over-year growth of 3.5%.
The Zacks Consensus Estimate for WPC’s 2025 FFO per share is pegged at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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SBAC Stock Rises 12% Year to Date: Will the Trend Continue?
Shares of SBA Communications (SBAC - Free Report) have rallied 12% year to date, outperforming the industry's upside of 0.9%.
Last month, this tower REIT reported first-quarter 2025 adjusted funds from operations (AFFO) per share of $3.18, beating the Zacks Consensus Estimate of $3.12. However, the figure implies a drop of 3.3% from the prior-year quarter. Results reflected a significant improvement in site-development revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent.
Analysts seem positive about this Zacks Rank #3 (Hold) company. The Zacks Consensus Estimate for its 2025 FFO per share has been revised marginally northward to $12.72 over the past week.
Image Source: Zacks Investment Research
Factors Behind SBAC Stock Price Rise: Will This Trend Last?
The advancement in mobile technology, such as 4G and 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. With increasing smartphone adoption, greater broadband demand and plans for 5G service worldwide, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. SBA Communications’ portfolio of extensive infrastructure assets is well-poised to capitalize on this upbeat trend.
SBA Communications has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive. The company also offers wireless service providers assistance in developing and maintaining their networks. Given the vast array of services the company offers due to its extensive site development experience, it is likely to propel its growth over the long term.
SBA Communications continues to expand its business into domestic and select international markets with high-growth characteristics. In the first quarter, SBAC acquired 344 communication sites, including Milicom’s 321 sites, for a total cash consideration of $58 million. The company also built 67 towers during this period. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth worldwide.
SBA Communications’ dividend hikes and share buybacks demonstrate its commitment to driving shareholder value and superior capital-distribution ability. In February 2025, the REIT announced a quarterly cash dividend of $1.11 per share on its Class A common stock, indicating an increase of nearly 13% from the prior quarter. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 19.97%. Given SBA Communications’ solid operating platform, decent financial position and a lower-than-industry dividend payout rate, the dividend distribution is expected to be sustainable over the long run.
Also, the company has $1.5 billion of authorization remaining under its stock buyback plan as of April 28. 2025. Following the first quarter of 2025, SBA Communications repurchased 583,000 shares of its Class A common stock for an aggregate amount of $122.9 million under its $1 billion stock repurchase plan. Such efforts boost shareholders’ confidence in the stock.
Key Risks for SBAC
High customer concentration and the ongoing consolidation in the wireless industry are concerns for SBA Communications’ top-line growth. Elevated interest rates add to the company’s woes.
Stocks to Consider
Some better-ranked stocks from the broader REIT sector are VICI Properties (VICI - Free Report) and W.P. Carey (WPC - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI’s 2025 FFO per share is pegged at $2.34, implying year-over-year growth of 3.5%.
The Zacks Consensus Estimate for WPC’s 2025 FFO per share is pegged at $4.88, indicating an increase of 3.8% from the year-ago reported figure.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.