Strength Seen in SBA Communications (SBAC): Can Its 7.3% Jump Turn into More Strength?

SBA Communications (SBAC) shares soared 7.3% in the last trading session to close at $182.49. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 6.3% loss over the past four weeks.

The increased investor optimism in the stock can be attributed to SpaceX’s spectrum acquisition deal, which could boost demand for terrestrial infrastructure and create future tower leasing opportunities for SBA Communications.

This communications tower operator is expected to post quarterly FFO of $3.12 per share in its upcoming report, which represents a year-over-year change of -5.5%. Revenues are expected to be $727.06 million, down 0.7% from the year-ago quarter.

FFO and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in FFO estimate revisions are strongly correlated with near-term stock price movements.

For SBA Communications, the consensus FFO per share estimate for the quarter has been revised 0.5% lower over the last 30 days to the current level. And a negative trend in FFO estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SBAC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

SBA Communications is part of the Zacks REIT and Equity Trust - Other industry. Gladstone Commercial (GOOD), another stock in the same industry, closed the last trading session 0.2% lower at $12.68. GOOD has returned -0.6% in the past month.

For Gladstone Commercial, the consensus FFO per share estimate for the upcoming report has remained unchanged over the past month at $0.34. This represents a change of -2.9% from what the company reported a year ago. Gladstone Commercial currently has a Zacks Rank of #3 (Hold).

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

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