It has been about a month since the last earnings report for American Tower (AMT). Shares have lost about 2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American Tower due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for American Tower Corporation before we dive into how investors and analysts have reacted as of late.
American Tower Q2 AFFO Meets Estimates, Revenues Beat, '26 View Up
American Tower Corporation reported second-quarter 2026 adjusted funds from operations (AFFO) per share of $2.71, matching the Zacks Consensus Estimate. The metric increased 4.2% from the year-ago quarter.
Total revenues rose 4.7% year over year to $2.75 billion, surpassing the consensus mark by 1.5%. Results benefited from higher property revenues, robust global leasing activity and continued data center growth.
American Tower’s Property Portfolio Drives Revenue Growth
Total property revenues increased 6.3% year over year to $2.69 billion. Property operations remained the company’s primary growth engine, supported by tower leasing demand and expansion across its data center platform.
Total tenant billings grew 2.4%, while organic tenant billings rose $34 million. Property gross margin expanded 4.9% to $1.98 billion, with the property gross margin standing at 73.7%.
American Tower Benefits From Data Center Demand
Data center revenues increased 13.4% year over year to $297 million. Cash revenues jumped 12.3%, reflecting healthy customer demand and strong leasing activity at CoreSite.
Management highlighted record leasing activity in the business. The company now expects data center property revenue growth of 14.9% at the midpoint of its updated 2026 outlook, indicating faster growth than anticipated earlier in the year.
American Tower Posts Broad Regional Leasing Trends
Organic tenant billings growth, excluding the impact of DISH churn, was approximately 4% globally. Africa & APAC delivered a 10.6% rise, while Europe recorded an increase of 4.1%.
U.S. & Canada organic tenant billings grew 0.7% on a reported basis but were approximately 5% when excluding DISH churn. Latin America declined 2.4%, reflecting softer tenant billing trends in the region.
American Tower Generates Strong Cash Flow
Cash provided by operating activities increased 16% year over year to $1.49 billion. After total cash capital expenditures of $329 million, free cash flow climbed 19.6% to $1.16 billion.
The company declared a quarterly distribution of $1.79 per share, up 5.3% from the prior-year period. It also repurchased approximately 0.1 million shares for about $19 million during the quarter.
American Tower Maintains Financial Flexibility
American Tower ended June with net debt of $35.43 billion, resulting in a net leverage ratio of 4.9 times annualized adjusted EBITDA.
Total liquidity stood at approximately $9.9 billion. This included nearly $1.8 billion in cash and roughly $8.2 billion available under revolving credit facilities, net of outstanding letters of credit.
American Tower Raises Its 2026 Outlook
American Tower raised the midpoint of its full-year property revenue outlook by $110 million. Property revenues are now projected between $10.70 billion and $10.85 billion, implying 4.5% growth at the midpoint. AFFO per share is projected between $11 and $11.17.
The updated outlook reflects favorable currency movements, data center outperformance and one-time expense benefits. The company also expects approximately 1% organic tenant billings growth, or roughly 4%, excluding DISH churn, along with about 15% data center revenue growth.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, American Tower has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, American Tower has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
American Tower is part of the Zacks REIT and Equity Trust - Other industry. Over the past month, Digital Realty Trust (DLR), a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended June 2026 more than a month ago.
Digital Realty Trust reported revenues of $1.92 billion in the last reported quarter, representing a year-over-year change of +28.9%. EPS of $1.21 for the same period compares with $1.87 a year ago.
For the current quarter, Digital Realty Trust is expected to post earnings of $1.98 per share, indicating a change of 0% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
Digital Realty Trust has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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This article originally published on Zacks Investment Research (zacks.com).