What's in the Cards for SBA Communications Stock This Earnings Season?

SBA Communications Corporation SBAC is scheduled to report third-quarter 2024 results on Oct. 28 after the market closes. The company’s quarterly results may display a decline in revenues and adjusted funds from operations (AFFO) per share year over year.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, this Boca Raton, FL-based communications tower REIT reported an AFFO per share of $3.29, beating the Zacks Consensus Estimate by a whisker. Results reflected a decent improvement in site leasing revenues, benefiting from the addition of sites to its portfolio. However, lower revenues posted by site development hurt results to some extent.Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on three occasions and missed in the remaining period, the average beat being 1.23%. The graph below depicts this surprise history:SBA Communications Corporation Price and EPS Surprise SBA Communications Corporation price-eps-surprise | SBA Communications Corporation QuoteFactors at Play for SBA CommunicationsWith 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. This has been spurring the demand for SBA Communications’ wireless communications infrastructure.Moreover,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.Also, portfolio expansion moves, domestically and internationally, to capitalize on the industry’s secular trends are encouraging.However, the ongoing consolidation in the wireless industry is likely to have impacted the company’s third-quarter performance. High interest rates and elevated churn in certain markets where the company operates might have been other deterrents to some extent.The Zacks Consensus Estimate for third-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $628.8 million, indicating a decrease from the year-ago quarter’s $637.4 million.The site-development revenues are also expected to be on the lower side in the third quarter. The consensus mark stands at $37.8 million, implying a decline from $45.1 million reported in the year-ago period.The Zacks Consensus Estimate for total quarterly revenues is pegged at $669 million, indicating a year-over-year decline of 2.0%.The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has remained unrevised at $3.32 over the past month. The figure implies a marginal year-over-year decline.What Our Quantitative Model Predicts for SBA CommunicationsOur proven model predicts a surprise in terms of AFFO 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 chances of an AFFO beat, which is the case here.SBA Communications currently has an Earnings ESP of 0.25% and a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks That Warrant a LookHere are two stocks from the broader REIT sector — Public Storage PSA and Extra Space Storage EXR— that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.Public Storage, scheduled to report quarterly numbers on Oct. 30, has an Earnings ESP of +0.26% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.Extra Space Storage is slated to report quarterly numbers on Oct. 29. EXR has an Earnings ESP of +0.67% and carries a Zacks Rank of 3 at present.Performance of Another Tower REITCrown Castle Inc. CCI reported third-quarter 2024 AFFO per share of $1.84, outpacing the Zacks Consensus Estimate of $1.80.Results reflected a rise in site rental revenues and a decline in total operating expenses year over year. However, a decline in services and other revenues affected the results to some extent.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.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Public Storage (PSA): Free Stock Analysis Report Crown Castle Inc. (CCI): Free Stock Analysis Report SBA Communications Corporation (SBAC): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks