We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
Read MoreHide Full Article
SBA Communications (SBAC - Free Report) is likely to experience a healthy growth momentum with extensive infrastructure assets, driven by increased consumer demand and the adoption of data-driven mobile devices and applications. The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves, domestically and internationally, are encouraging. However, customer concentration and consolidation in the wireless industry are key near-term concerns.
The company’s shares have risen 5.2% over the past three months against the industry’s fall of 4.8%.
Analysts seem bullish on this Zacks Rank #3 (Hold) company, with the Zacks Consensus Estimate for SBAC’s 2025 funds from operations (FFO) per share moving marginally northward over the past week to $12.72. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
What’s Aiding SBAC?
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.
SBAC 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.
SBAC continues to expand its tower portfolio and seeks new growth opportunities through expansion in domestic and international markets. In the first quarter of 2025, SBA Communications 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 across the globe.
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 lower-than-industry dividend payout rate, the dividend distribution is expected to be sustainable over the long run.
Also, 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.
What’s Hurting SBAC?
The company has a high customer concentration, with T-Mobile (TMUS - Free Report) , AT&T (T - Free Report) and Verizon (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the first quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.2%, 30.4% and 20.4%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like T-Mobile, AT&T and Verizon, consolidation among them or a reduction in network spending might hurt the company’s top line significantly.
SBA Communications has a substantially leveraged balance sheet, with $12.5 billion of total debt and net debt to the annualized adjusted EBITDA leverage of 6.4X as of the end of the first quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated.
Moreover, the company’s debt-to-capital ratio is higher than the industry average. A still elevated interest rate environment is likely to result in high borrowing costs for the company, affecting its ability to purchase or develop real estate.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
SBA Communications (SBAC - Free Report) is likely to experience a healthy growth momentum with extensive infrastructure assets, driven by increased consumer demand and the adoption of data-driven mobile devices and applications. The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves, domestically and internationally, are encouraging. However, customer concentration and consolidation in the wireless industry are key near-term concerns.
The company’s shares have risen 5.2% over the past three months against the industry’s fall of 4.8%.
Analysts seem bullish on this Zacks Rank #3 (Hold) company, with the Zacks Consensus Estimate for SBAC’s 2025 funds from operations (FFO) per share moving marginally northward over the past week to $12.72. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
What’s Aiding SBAC?
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.
SBAC 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.
SBAC continues to expand its tower portfolio and seeks new growth opportunities through expansion in domestic and international markets. In the first quarter of 2025, SBA Communications 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 across the globe.
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 lower-than-industry dividend payout rate, the dividend distribution is expected to be sustainable over the long run.
Also, 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.
What’s Hurting SBAC?
The company has a high customer concentration, with T-Mobile (TMUS - Free Report) , AT&T (T - Free Report) and Verizon (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the first quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.2%, 30.4% and 20.4%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like T-Mobile, AT&T and Verizon, consolidation among them or a reduction in network spending might hurt the company’s top line significantly.
SBA Communications has a substantially leveraged balance sheet, with $12.5 billion of total debt and net debt to the annualized adjusted EBITDA leverage of 6.4X as of the end of the first quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated.
Moreover, the company’s debt-to-capital ratio is higher than the industry average. A still elevated interest rate environment is likely to result in high borrowing costs for the company, affecting its ability to purchase or develop real estate.