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Will This Price Target Increase Help SBA Communications (SBAC) Stock Today?

Stocks in this article: SBAC

Story updated at 10 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Jefferies increased its price target for SBA Communications (SBAC) to $115 from $110 Wednesday.

SBA Communications gained 0.7% to $100.94 in morning trading.

The analyst firm maintained its "buy" rating for the company. The increased price target was driven by higher growth expectations according to Jefferies analysts.

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Separately, TheStreet Ratings team rates SBA COMMUNICATIONS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SBA COMMUNICATIONS CORP (SBAC) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company has favored debt over equity in the management of its balance sheet."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • SBAC's revenue growth has slightly outpaced the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 10.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for SBA COMMUNICATIONS CORP is currently very high, coming in at 71.88%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, SBAC's net profit margin of 0.40% significantly trails the industry average.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Wireless Telecommunication Services industry average, but is greater than that of the S&P 500. The net income increased by 106.3% when compared to the same quarter one year prior, rising from -$22.38 million to $1.41 million.
  • The debt-to-equity ratio is very high at 17.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, SBAC has a quick ratio of 0.60, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • You can view the full analysis from the report here: SBAC Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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