On Mar 4, 2014, we issued an updated research report on
American Tower Corp.
). Increased deployment of 3G/4G networks, aggressive buyouts of
towers in emerging markets, significant margin improvement and
higher dividend growth will continue to act as catalysts for the
American Tower failed to deliver positive earnings surprise in
three of the last four quarters, with an average beat of 0.61%.
The company reported mixed financial results for the fourth
quarter of fiscal 2013 with the bottom line missing the Zacks
Consensus Estimate but the top line beating.
Higher adoption of smartphones/tablets coupled with increased
deployment of 3G/4G networks by the carriers across the world
will continue to drive the demand for tower space, going forward.
American Tower is rapidly expanding its business operations in
various emerging markets.
In addition to Brazil and Mexico, American Tower has taken a
major initiative to expand its operations in India. Moreover, the
company has started offering cost-effective outdoor Distributed
Antenna Systems (DAS) to its customers.
AMER TOWER CORP (AMT): Free Stock Analysis
CROWN CASTLE (CCI): Free Stock Analysis
COUSIN PROP INC (CUZ): Free Stock Analysis
DOUGLAS EMMETT (DEI): Free Stock Analysis
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On the downside, American Tower has a substantially leveraged
balance sheet. At the end of the second quarter of 2013, the
company had nearly $8.79 billion of net debt (total debt-cash
& cash equivalents) and the debt-to-capitalization ratio was
0.71. High level of indebtedness increases the possibility of a
company failing to generate sufficient amount of cash to meet its
debt obligations in the future. This may also hinder the
company's effort to access the debt market to borrow and
refinance at favorable rates.
Furthermore, higher customer concentration for American Tower
coupled with huge exposure to foreign exchange rate risks will
act as headwinds for the company, going forward.
Currently, American Tower has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Other stocks in the wireless tower industry include
Crown Castle International Corp.
Cousins Properties Inc.
Douglas Emmett Inc.
). All three have a Zacks Rank #2 (Buy).