SBA Communications CorporationSBAC

Morningstar Rating

Stock Research and Analysis

by Imari Love

The investment case for being exposed to the United States wireless sector remains strong. Although robust subscriber growth has pushed the cellular penetration rate near 90%, usage growth is not slowing down, ranging between 15% and 20% per year. As Read more

Bulls Say

The firm has a portfolio of young, high-capacity towers (space for four to five telephony tenants per tower). Thus, there is low operating expense and augmentation capital expenditure per tower.

The company has historically managed liquidity well through a mixture of acquisitions and share repurchases.

The firm has operated very well amidst a difficult economic backdrop. Margins are hitting all-time highs, and management recently greenlit a $250 million share buyback. Read more

Bears Say

SBA's underperforming site-development business continues to be a drag on gross margins, which are already the lowest of the publicly traded companies.

Although the firm is lowering its debt burden, it still has the highest leverage in the industry. If interest rates begin to rise again, SBA will be hit a little harder than its peers.

SBA lacks the financial flexibility to pursue large transactions. As a result, the company is unlikely to tap attractive expansion opportunities in emerging markets. Read more

Strategy

The firm's strategy is focused on building its site-leasing business by maximizing use of its tower capacity. SBA wants its growth to be disciplined by controlling its underlying land positions and using Read more

Management

Steven Bernstein founded SBA in 1989 and has served as chairman since then. President and CEO Jeffrey Stoops has been with SBA since 1997, including a stint as CFO from 1998 to 2000; he assumed the role of CEO in 2002. In general, the executive management Read more

Profile

SBA is a leading independent owner and operator of wireless communications towers in the United States, Puerto Rico, Canada, and the U.S. Virgin Islands. Its principal business Read more

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