May 23, 2024
Top 10 Stock SBA Communications Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: SBA Communications – Top 10 Stock in Dow Jones U.S. Telecommunications Index
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SBA Communications is listed as a top 10 stock on May 23, 2024 in the market index D.J. US Telecom because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 56 (high 56% performer), Obermatt assesses an overall buy recommendation for SBA Communications on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | REITs: Specialized |
| Index | R/E USA, NASDAQ, D.J. US Telecom, S&P 500 |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View SBA Communications Buy
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 7 |
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| SENTIMENT | ||||||||
| SENTIMENT | 96 |
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| 360° VIEW | ||||||||
| 360° VIEW | 56 |
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ANALYSIS: With an Obermatt 360° View of 56 (better than 56% compared with alternatives), overall professional sentiment and financial characteristics for the stock SBA Communications are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for SBA Communications. The consolidated Sentiment Rank has a good rank of 96, which means that professional investors are more optimistic about the stock than for 96% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 47, which means that the share price of SBA Communications is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 45, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 45% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 7 which means that the company has a riskier financing structure than 93% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 56, SBA Communications is better positioned than 56% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 96) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of SBA Communicationṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for SBA Communications very positive
ANALYSIS: With an Obermatt Sentiment Rank of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock SBA Communications is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for SBA Communications. Analyst Opinions are at a rank of 73 (better than 73% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 97, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in SBA Communications. The Professional Investors rank is 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 53 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 96 (more positive than 96% compared with investment alternatives), SBA Communications has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean SBA Communications stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: SBA Communications Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), SBA Communications shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for SBA Communications. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 97, which means that the stock price is lower compared with invested capital than for 97% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 30 which means the stock price compared with what market professionals expect for future profits is higher than 70% of comparable companies, indicating a low value concerning SBA Communications's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 97 and for the dividend yields rank which is lower than for 81% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on SBA Communications's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for SBA Communications, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: SBA Communications Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), SBA Communications shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for SBA Communications. Profit Growth, with a rank of 80 (better than 80% of its competitors), and Capital Growth, with a rank of 57, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 48, which means that, currently, professionals expect the company to grow less than 52% of its competitors, and Stock Returns are at a rank of 6. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: SBA Communications Debt Financing Safety risky
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 7 |
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ANALYSIS: With an Obermatt Safety Rank of 7 (better than 7% compared with alternatives), the company SBA Communications has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of SBA Communications is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for SBA Communications. Liquidity is at 34, meaning that the company generates less profit to service its debt than 66% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 2, meaning the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. Finally, Refinancing is at a rank of 11 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 7 (worse than 93% compared with alternatives), SBA Communications has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: SBA Communications Below-Average Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 29 |
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ANALYSIS: With an Obermatt Combined Rank of 29 (worse than 71% compared with investment alternatives), SBA Communications (REITs: Specialized, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SBA Communications are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), show below-average growth (Growth Rank of 45), and are riskily financed (Safety Rank of 7), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 29, is a hold recommendation based on SBA Communications's financial characteristics. As the company SBA Communications's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 47), low growth (Obermatt Growth Rank of 45), and risky financing practices (Obermatt Safety Rank of 7), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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