American Tower Corporation (REIT) (AMT) Buy or Sell Stock Guide

Last updated: May 12, '19

Are you looking for the analysis of American Tower Corporation (REIT) (AMT) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 7 reasons to buy and 6 reasons to sell AMT stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about AMT stock:

  • Is AMT a buy or a sell?
  • Should I sell or hold AMT stock today?
  • Is AMT a good buy / investment?
  • What are AMT analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy AMT stock:

1. The tower business model is extremely attractive, providing strong recurring cash flow based on long-term contracts and direct exposure to surging wireless data demand as carriers add new cell sites to their networks.

2. The REIT structure allows the firm to avoid taxes without compromising its growth prospects. The dividend only represents roughly 35% of adjusted funds from operations.

3. The firm now has more than half of its communication sites in international markets. This increases diversification and boosts its growth profile.

4. AMT quarterly revenue growth was 25.10%, higher than the industry and sector average revenue growth (2.74% and 2.71%, respectively). See AMT revenue growth chart.

5. AMT profitability is improving. The YoY profit margin change was 2.60percentage points. See AMT profitability chart.

6. AMT forward dividend yield is 1.83%, higher than the industry (0.41%) and sector (0.37%) forward dividend yields. See AMT forward dividend chart.

7. AMT average analyst rating is Buy. See AMT analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell AMT stock (i.e., the bear case):

1. Despite diversification efforts, the top four U.S. carriers still generate 60% of American Tower's leasing revenue. A major disruption in spending among these carrier, potentially resulting from the merger of Sprint and T-Mobile, would seriously hamper growth.

2. The firm's exposure to emerging markets adds foreign exchange risk, exposure to economic volatility, and regulatory uncertainty.

3. Net leverage stands above 5 times EBITDA, a level that leaves the firm exposed to unforeseen changes in tower demand, perhaps resulting from new technologies like small cells.

4. AMT stock price ($195.66) is close to the 52-week high ($197.96). Perhaps now is a good time to sell? See AMT price chart.

5. AMT Price/Book ratio is 15.95, and it’s high compared to its industry peers’ P/B ratios. See AMT forward Price/Book ratio chart.

6. AMT average analyst price target ($184.59) is below its current price ($195.66). See AMT price target chart.

Now let's look at the key statistics for AMT:

Metrics AMT
Price $202.95
Average Price Target / Upside $184.59 / -9.05%
Average Analyst Rating Buy
Industry Telecom Services
Sector Communication Services
Number of Employees 5,026
Market Cap $87.55B
Forward P/E Ratio 46.39
Price/Book Ratio 11.66
PEG 2.69
Revenue (TTM) $7.51B
YoY Quarterly Revenue Growth 4.1%
Profit Margin 17.95%

What are your thoughts on AMT?

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