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Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
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Key Takeaways
SBAC benefits from rising mobile data usage and long-term tower leases supporting stable revenues.
The company expands its portfolio with 447 acquired sites and 151 newly built towers in the quarter.
SBAC faces risks from heavy reliance on major carriers and high debt levels.
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 are encouraging.
However, customer concentration and consolidation in the wireless industry are key near-term concerns. A leveraged balance sheet is likely to keep its financial obligations elevated.
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-positioned 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-15 year) tower leases. 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 third quarter, SBA Communications acquired 447 communication sites, including Milicom’s 446 sites, for a total cash consideration of $142.8 million. The company also built 151 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. The company has increased its dividend five times in the last five years and its five-year annualized dividend growth rate is 18.52%. Given SBA Communications’ solid operating platform, the dividend distribution is expected to be sustainable over the long run.
From the beginning of the year through Nov. 3, 2025, SBA Communications repurchased 1.6 million shares of its Class A common stock for an aggregate amount of $325 million under its $1.5 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 Wireless (T - Free Report) and Verizon Wireless (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the third quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.6%, 30.5% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like TMUS, T and VZ, 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 $12.8 billion of total debt and a net debt to the annualized adjusted EBITDA leverage of 6.2X as of the end of the third quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated. With a high level of debt, interest expenses are likely to remain elevated. In the third quarter of 2025, net cash interest expenses increased 25.5% year over year.
Image: Bigstock
Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
Key Takeaways
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 are encouraging.
However, customer concentration and consolidation in the wireless industry are key near-term concerns. A leveraged balance sheet is likely to keep its financial obligations elevated.
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-positioned 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-15 year) tower leases. 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 third quarter, SBA Communications acquired 447 communication sites, including Milicom’s 446 sites, for a total cash consideration of $142.8 million. The company also built 151 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. The company has increased its dividend five times in the last five years and its five-year annualized dividend growth rate is 18.52%. Given SBA Communications’ solid operating platform, the dividend distribution is expected to be sustainable over the long run.
From the beginning of the year through Nov. 3, 2025, SBA Communications repurchased 1.6 million shares of its Class A common stock for an aggregate amount of $325 million under its $1.5 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 Wireless (T - Free Report) and Verizon Wireless (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the third quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.6%, 30.5% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like TMUS, T and VZ, 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 $12.8 billion of total debt and a net debt to the annualized adjusted EBITDA leverage of 6.2X as of the end of the third quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated. With a high level of debt, interest expenses are likely to remain elevated. In the third quarter of 2025, net cash interest expenses increased 25.5% year over year.
In the past three months, shares of this Zacks Rank #3 (Hold) company have declined 5.2% against the industry's growth of 1.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research