SBA Communications is scored 45 for moat and 28 for management. The management score rests on a return on invested capital of 10.0% and a gross margin of 41.6% — figures that describe capital earning less than it costs to employ. Shareholder equity is negative, so the debt-to-equity figure is not meaningful here — usually the mark of heavy buybacks rather than distress, but worth checking. A moderate moat alongside weak management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 6.2% a year, the rate measured from the filings. The exit multiple assumed is 12.4x. That produces an intrinsic value of $52.07, a 10-CAP price of $105.55 and a payback time price of $111.78, with the value zone set at the highest of the three, $111.78. Today's price of $158.02 is 41% above it.
The price is above the value zone and the business scores 45 for moat and 28 for management. Neither test argues for paying up here.
| Price | $158.02 |
| Market cap | $16.8B |
| P/E ratio | 17.0x |
| Return on invested capital | 10.0% |
| Gross margin | 41.6% |
| Debt to equity | -3.16x |
| Free cash flow yield | 5.1% |
| Growth rate used | 6.2% |
| Growth rate measured | 6.0% |
| Exit multiple assumed | 12.4x |
| Company | Moat | Buy price |
| PotlatchDeltic Corp. (PCH) | 30 | $19.73 |
| Iron Mountain (IRM) | 33 | $10.28 |
| Digital Realty (DLR) | 53 | $62.46 |
| American Tower Corp. (AMT) | 59 | $100.23 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of SBA Communications rather than accepting ours.