Let’s talk SBA

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Late last week, SBA Communications reported their first quarter earnings. SBA posted results that were at the high-end or above the guidance of many analysts. After Friday’s quarterly conference call, the analysts updated their outlook on the company:

HomePageLogoColby Synesael of Cowen and Company: “The situation is very similar to what occurred last quarter although we’d point out the increases last quarter were more meaningful than the increases this quarter. As such we expect the stock to trade more in-line with the market today vs. the 3.9% pop it saw the day it reported last quarter.”

Jonathan Schildkraut, Evercore ISI: “The company has settled the remaining amount of warrants related to its converts, leading us to believe the company will be able to focus on directing all of its investment capacity back to portfolio acquisition and share buybacks (notably, SBAC has $150 million remaining under its $300 million share repurchase program). Coming out of 4Q, SBAC had roughly $630 million of investible capacity, and subsequent to 1Q, has agreed to ~$298 million in acquisitions. Also, over the last five years SBAC has beaten its initial site leasing and EBITDA growth targets by more than 900bps (basis points) on average and beaten AFFO by more than 1,100bps (only two years of AFFO guidance history).

Spencer Kurn, New Street Research: “Guidance was disappointing. We went into results thinking guidance was too conservative and was likely to increase throughout the year.  The first quarter has historically shown the largest increase to full year guidance (+4% in each of the last two years); however, mgmt. left guidance largely unchanged this quarter.  We are modestly lowering our growth expectations for 2015 because it seems that the level of activity we expected did not make it into guidance, but we still remain ahead of guidance and consensus for the year. Although guidance was disappointing, SBAC remains our favorite tower stock because we believe long-term growth expectations are too low.”

Jennifer Fritzsche of Wells Fargo, “Q1 numbers came in slightly ahead of estimates, with international site leasing revenue showing solid growth (92.6% yr/yr and 10% sequentially despite FX headwinds). SBAC did trim its FY2015 guidance, with the midpoints of site leasing revenue declining $9 million, total revenues by $6 million and adjusted EBITDA by -$2 million. We do note that capex was considerably higher than our estimates, with FY2015 capex guidance rising $31 million. “

April 27, 2015 |
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