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Factors to Impact SBA Communications' (SBAC) Q4 Earnings
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SBA Communications Corporation (SBAC - Free Report) is scheduled to report fourth-quarter and full-year 2020 results on Feb 22, after the bell. The company’s results are expected to reflect year-over-year increase in revenues and funds from operations (“FFO”) per share.
In the last-reported quarter, this Boca Raton, FL-based communications tower REIT delivered a surprise of 2.59% in terms of FFO per share. Results reflected solid operating performance in its site-leasing business. The company continues to benefit from the addition of sites to its portfolio.
In the trailing four quarters, SBA Communications surpassed the Zacks Consensus Estimate on all occasions, the surprise being 1.77%, on average. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
Let’s see how things are shaping up for this announcement.
Factors at Play
With the rollout of the latest technologies and significant growth in the overall network utilization, carriers have continued to spend capital to expand coverage and capacity in the United States. Further, remote working and online purchases amid the pandemic are likely to have led to a surge in demand for cellular data, acting as a catalyst for tower REITs that play a pivotal role in providing critical infrastructures needed for a seamless connection.
These narratives indicate a healthy domestic tower-leasing environment in the fourth quarter for SBA Communications. In fact, increased activity post the T-mobile merger and growing application backlog will likely result in increase in domestic leasing activity in the fourth quarter.
Moreover, the company has been making continued efforts to expand its tower portfolio into select markets with high growth characteristics on the back of acquisitions and development. This has positioned it well to benefit from high demand for towers. It is expected to have driven the company’s fourth-quarter site-leasing revenues. The company’s long-term leases and embedded rent escalators are anticipated to have supported the tower-leasing business’ resilience. Also, opportunistically repurchasing of its stocks is likely to have positively contributed to adjusted FFO per share growth.
However, international bookings might have remained under pressure in the fourth quarter as international wireless customers are expected to have resorted to reduction in capital expenditures and prioritized cash.
Amid these, the Zacks Consensus Estimate for fourth-quarter site-leasing revenues, which account for the lion’s share of the total revenues, is pinned at $493 million, indicating an increase from $487 million in the prior quarter and $481 million in the year-ago period.
As such, the estimate for fourth-quarter total revenues is pinned at $529.75 million. This indicates year-over-year growth of 3.13%. Revenues from site-development operations are estimated to be $37.97 million, slightly up from $36.18 million in the prior quarter and $32.60 million in the year-ago period.
Lastly, the company’s activities during the quarter were inadequate to gain adequate analyst confidence. Notably, the Zacks Consensus Estimate for fourth-quarter FFO per share has been revised 3-cent downward to $2.44 over the past month. Nonetheless, it suggests year-over-year growth of 11.9%.
SBA Communications expects 2020 adjusted FFO (AFFO) per share of $9.27-$9.50. Moreover, the company projects total revenues of $2,065-$2,085 million, site-leasing revenues in the $1,947-$1,957 million band while site-development revenues are likely to be between $118 million and $128 million. Moreover, adjusted EBITDA is predicted between $1,485 million and $1,495 million.
For the full year, the Zacks Consensus Estimate for adjusted FFO per share has been revised 3 cents downward to $9.38 over the past month. However, the figure suggests a 10.5% increase year on year. Revenues are projected to be up 3.1% year over year to $2.08 billion.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for SBA Communications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SBA Communications currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of –1.85%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
Life Storage, Inc. , slated to release earnings figures on Feb 22, has an Earnings ESP of +0.43% and holds a Zacks Rank of 3, currently.
Public Storage (PSA - Free Report) , scheduled to announce fourth-quarter results on Feb 24, has an Earnings ESP of +0.53% and carries a Zacks Rank of 3 at present.
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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Factors to Impact SBA Communications' (SBAC) Q4 Earnings
SBA Communications Corporation (SBAC - Free Report) is scheduled to report fourth-quarter and full-year 2020 results on Feb 22, after the bell. The company’s results are expected to reflect year-over-year increase in revenues and funds from operations (“FFO”) per share.
In the last-reported quarter, this Boca Raton, FL-based communications tower REIT delivered a surprise of 2.59% in terms of FFO per share. Results reflected solid operating performance in its site-leasing business. The company continues to benefit from the addition of sites to its portfolio.
In the trailing four quarters, SBA Communications surpassed the Zacks Consensus Estimate on all occasions, the surprise being 1.77%, on average. The graph below depicts this surprise history:
SBA Communications Corporation Price and EPS Surprise
SBA Communications Corporation price-eps-surprise | SBA Communications Corporation Quote
Let’s see how things are shaping up for this announcement.
Factors at Play
With the rollout of the latest technologies and significant growth in the overall network utilization, carriers have continued to spend capital to expand coverage and capacity in the United States. Further, remote working and online purchases amid the pandemic are likely to have led to a surge in demand for cellular data, acting as a catalyst for tower REITs that play a pivotal role in providing critical infrastructures needed for a seamless connection.
These narratives indicate a healthy domestic tower-leasing environment in the fourth quarter for SBA Communications. In fact, increased activity post the T-mobile merger and growing application backlog will likely result in increase in domestic leasing activity in the fourth quarter.
Moreover, the company has been making continued efforts to expand its tower portfolio into select markets with high growth characteristics on the back of acquisitions and development. This has positioned it well to benefit from high demand for towers. It is expected to have driven the company’s fourth-quarter site-leasing revenues. The company’s long-term leases and embedded rent escalators are anticipated to have supported the tower-leasing business’ resilience. Also, opportunistically repurchasing of its stocks is likely to have positively contributed to adjusted FFO per share growth.
However, international bookings might have remained under pressure in the fourth quarter as international wireless customers are expected to have resorted to reduction in capital expenditures and prioritized cash.
Amid these, the Zacks Consensus Estimate for fourth-quarter site-leasing revenues, which account for the lion’s share of the total revenues, is pinned at $493 million, indicating an increase from $487 million in the prior quarter and $481 million in the year-ago period.
As such, the estimate for fourth-quarter total revenues is pinned at $529.75 million. This indicates year-over-year growth of 3.13%. Revenues from site-development operations are estimated to be $37.97 million, slightly up from $36.18 million in the prior quarter and $32.60 million in the year-ago period.
Lastly, the company’s activities during the quarter were inadequate to gain adequate analyst confidence. Notably, the Zacks Consensus Estimate for fourth-quarter FFO per share has been revised 3-cent downward to $2.44 over the past month. Nonetheless, it suggests year-over-year growth of 11.9%.
SBA Communications expects 2020 adjusted FFO (AFFO) per share of $9.27-$9.50. Moreover, the company projects total revenues of $2,065-$2,085 million, site-leasing revenues in the $1,947-$1,957 million band while site-development revenues are likely to be between $118 million and $128 million. Moreover, adjusted EBITDA is predicted between $1,485 million and $1,495 million.
For the full year, the Zacks Consensus Estimate for adjusted FFO per share has been revised 3 cents downward to $9.38 over the past month. However, the figure suggests a 10.5% increase year on year. Revenues are projected to be up 3.1% year over year to $2.08 billion.
Here is what our quantitative model predicts:
Our proven model does not conclusively predict a positive surprise in terms of FFO per share for SBA Communications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a FFO beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SBA Communications currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of –1.85%.
Stocks That Warrant a Look
Here are a few stocks in the REIT sector that you may want to consider, as our model shows that these have the right combination of elements to report a positive surprise this quarter:
American Tower Corporation (AMT - Free Report) , set to report quarterly numbers on Feb 25, currently has an Earnings ESP of +7.49% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Life Storage, Inc. , slated to release earnings figures on Feb 22, has an Earnings ESP of +0.43% and holds a Zacks Rank of 3, currently.
Public Storage (PSA - Free Report) , scheduled to announce fourth-quarter results on Feb 24, has an Earnings ESP of +0.53% and carries a Zacks Rank of 3 at present.
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.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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