Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (After Market Close)
Pre-Earnings Price$217.40Last close (Nov 2, 2023)
Post-Earnings Price$223.27Open (Nov 3, 2023)
Price Change
$5.87(+2.70%)
- Significant spectrum deployment ahead will drive future leasing activity, as there is still a lot of spectrum that needs to be deployed on SBA's towers, including dual-band 3.45 and C-band equipment, which is expected to contribute to next year's leasing.
- International demand is outpacing expectations, with higher-than-expected new leasing revenue due to customers' significant needs for 4G and 5G network expansion, leading to stronger international profitability.
- SBA is reducing debt and executing stock buybacks at attractive levels, utilizing free cash flow to pay down debt and repurchase shares, which is expected to be accretive both in the short term and over the long term.
- Declining Backlog and Slower Leasing Activity: SBA Communications reported that their backlogs are "a little bit lower than they've been in the past" due to carriers' reduced investment levels and slower execution of lease agreements. This downward trend is expected to continue into next year.
- Subdued Demand and Delayed Carrier Spending: The company acknowledged that demand is "subdued, given the financial conditions in the market." Factors such as the FCC's loss of spectrum auction authority and equipment readiness issues are holding back carrier spending, which could impact leasing activity.
- Elevated Valuations Limiting M&A Opportunities: SBA Communications faces a "very competitive environment" in mergers and acquisitions, with private asset valuations remaining elevated despite lower public valuations. This has influenced their capital allocation and could limit growth through acquisitions.