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Can High Revenues Aid SBA Communications (SBAC) Q1 Earnings?

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Earnings Estimates Moving Higher for Vanda (VNDA): Time to Buy?

Vanda (VNDA) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

SBA Communications Corporation SBAC is scheduled to report first-quarter 2018 financial results after the closing bell on Apr 30. The company is likely to report higher revenues in both the operating segments on the back of healthy growth dynamics.

Whether this could result in higher earnings for the quarter remains to be seen.

Top-Line Expansion

SBA Communications is expanding its tower portfolio while seeking new growth opportunities through enhancement of its scale of operations in international markets. It is offering wireless service providers assistance in developing networks.

The Zacks Consensus Estimate for revenues from Site Leasing segment, which accounts for the lion’s share of total revenues, is currently pegged at $427 million, up from $398 million reported in first-quarter 2017. Revenues from Site Development segment are expected to be $27.7 million compared with $25.8 million reported in the prior-year quarter. Consequently, total revenues for the quarter are likely to be $453 million, up from $423 million reported in the year-earlier quarter.

Other Key Factors

Operating profit from Site Leasing in the quarter is expected to increase to $334 million from $308 million reported in the year-earlier quarter while the same from Site Development is likely to decline to $4.7 million from $5.5 million year over year.

However, the company’s financials are likely to be affected by high customer concentration and consolidation in the wireless industry.

Our proven model does not conclusively show that SBA Communications is likely to beat earnings this quarter as it possesses neither of the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for an earnings beat. This is not the case here as you will see below:  

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -7.64%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  
 

SBA Communications Corporation Price and EPS Surprise

SBA Communications Corporation Price and EPS Surprise | SBA Communications Corporation Quote

Zacks Rank: SBA Communications has a Zacks Rank #4 (Sell).

As it is we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.

Stocks to Consider

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Amazon.com, Inc. AMZN has an Earnings ESP of +7.04% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Western Digital Corporation WDC has an Earnings ESP of +2.30% and a Zacks Rank #1.

Merit Medical Systems, Inc. MMSI has an Earnings ESP of +4.05% and a Zacks Rank #2.   

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