NEW YORK (TheStreet) -- Shares of SBA Communications (SBAC) - Get SBA Communications Corp. Class A Report are dropping by 6.3% to $98.56 on heavy trading volume early Tuesday afternoon, after the Boca Raton, FL-based company posted better-than-expected results for the 2016 first quarter, but provided a disappointing outlook.
After yesterday's closing bell, the operator of communication towers reported adjusted funds from operations of $1.45 per share, above analysts' expectations of $1.42 per share.
Revenue decreased by 2.5% to $399.8 million year-over-year, but was slightly higher than analysts' expectations of $398.7 million.
Pacific Crest, which has a "sector weight" rating on the stock, said the quarter was solid, but the outlook remains "overcast."
"SBA expects its customer activity to pause in the second half of 2016 and now expects steady leasing activity throughout the year, compared to its previous expectations for sequential improvements. We remain on the sidelines until we see site-leasing activity and AFFO/share growth improve," the firm wrote in a note.
While Pacific Crest views the tower sector as attractive, it projects that SBA Communications will generate lower AFFO per share growth compared to its peers this year.
About 2.87 million of the company's shares were traded so far today vs. its average volume of 754,087 shares per day.
Separately, TheStreet Ratings Team has a "Sell" rating with a score of D+ on the stock.
This is driven by a number of negative factors, which should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks covered by the team.
The area that has been the company's primary weakness has been its generally disappointing historical performance in the stock itself, the team believes.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: SBAC