SBA Communications to Report Q3 Earnings: What to Expect?

SBA Communications Corporation SBAC is scheduled to report third-quarter 2025 results on Nov. 3, after the market closes. While the company’s quarterly results might display a rise in revenues year over year, adjusted funds from operations (AFFO) per share is expected to decline.

In the last reported quarter, this Boca Raton, FL-based communications tower REIT reported an AFFO per share of $3.17, beating the Zacks Consensus Estimate of $3.12. Results reflected a growth in revenues during the quarter. However, higher costs and interest expenses undermined the performance to some extent.

Over the preceding four quarters, SBAC’s AFFO per share surpassed the Zacks Consensus Estimate on three occasions and met once, the average beat being 1.46%. The graph below depicts this surprise history:

SBA Communications Corporation Price and EPS Surprise

SBA Communications Corporation price-eps-surprise | SBA Communications Corporation Quote

Factors at Play

In the third quarter, SBA communications might have gained from wireless carriers’ high capital spending for network expansion amid growth in mobile data usage and accelerated 5G network deployment efforts.

The company’s long-term (typically five to 10 years) tower leases with wireless service providers that have built-in rent escalators are likely to have generated stable site-leasing revenues for the company in the quarter. Moreover, SBAC’s business expansion into domestic and select international markets might have led to revenue growth during the to-be-reported quarter.

However, high debt burden and elevated sprint-related churn in certain markets where the company operates might have been deterrents for SBAC’s quarterly performance to some extent.

Projections for SBA Communications

The Zacks Consensus Estimate for third-quarter site-leasing revenues, which account for the lion’s share of total revenues, is pegged at $651.2 million, indicating an increase from the year-ago quarter’s $625.7 million.

Site-development revenues are expected to improve in the third quarter. The consensus mark stands at $53.9 million, implying growth from $41.9 million reported in the year-ago period.

The Zacks Consensus Estimate for total quarterly revenues is pegged at $705.1 million, indicating year-over-year growth of 5.6%.

The company’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly AFFO per share has been revised a cent downward to $3.19 over the past month. The figure also implies a year-over-year decline of 3.9%.

What Our Quantitative Model Predicts for SBA Communications

Our proven model does not conclusively predict a surprise in terms of AFFO per share for SBA Communications this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an AFFO beat, which is not the case here.

SBA Communications currently has an Earnings ESP of -0.10% and a Zacks Rank of 4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Omega Healthcare Investors OHI and CubeSmart CUBE — that you may want to consider, as our model shows that these have the right combination of elements to report an earnings surprise this quarter.

OHI, slated to release quarterly numbers on Oct. 30, has an Earnings ESP of +0.65% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

CubeSmart, scheduled to report quarterly numbers on Oct. 30, has an Earnings ESP of +0.51% and carries a Zacks Rank of 3.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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