SBA Communications Corp Stock Hold Recommendation Reiterated (SBAC)

SBA Communications (Nasdaq:SBAC) has been reiterated by TheStreet Ratings as a hold with a ratings score of C
By Subhi Syed ,

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.

NEW YORK (

TheStreet

)

-- SBA Communications

(Nasdaq:

SBAC

) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and good cash flow from operations. 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 ratings report include:

  • SBAC's very impressive revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues leaped by 62.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 37.37% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • SBA COMMUNICATIONS CORP has improved earnings per share by 10.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SBA COMMUNICATIONS CORP reported poor results of -$1.50 versus -$1.14 in the prior year. This year, the market expects an improvement in earnings (-$0.43 versus -$1.50).
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Wireless Telecommunication Services industry average. The net income increased by 1.1% when compared to the same quarter one year prior, going from -$22.63 million to -$22.38 million.
  • The debt-to-equity ratio is very high at 7.70 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.34, which clearly demonstrates the inability to cover short-term cash needs.

SBA Communications Corporation owns and operates wireless communications towers in the United States, Canada, Costa Rica, El Salvador, Guatemala, Nicaragua, Panama, and Brazil. SBA has a market cap of $10.0 billion and is part of the services sector and diversified services industry. Shares are up 10.5% year to date as of the close of trading on Thursday.

You can view the full

SBA Ratings Report

or get investment ideas from our

investment research center

.

--Written by a member of TheStreet Ratings Staff.

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