Towerstream (TWER) and SBA Communications (SBAC) Critical Comparison

Towerstream (OTCMKTS: TWER) and SBA Communications (NASDAQ:SBAC) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Volatility and Risk

Towerstream has a beta of 0.11, indicating that its share price is 89% less volatile than the S&P 500. Comparatively, SBA Communications has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares Towerstream and SBA Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Towerstream -53.20% N/A -51.49%
SBA Communications 5.95% -4.71% 1.31%

Analyst Recommendations

This is a summary of recent recommendations for Towerstream and SBA Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Towerstream 0 0 0 0 N/A
SBA Communications 0 4 10 0 2.71

SBA Communications has a consensus price target of $158.23, indicating a potential downside of 4.49%. Given SBA Communications’ higher probable upside, analysts plainly believe SBA Communications is more favorable than Towerstream.

Valuation & Earnings

This table compares Towerstream and SBA Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Towerstream $26.90 million 0.05 -$20.43 million ($83.18) -0.04
SBA Communications $1.63 billion 11.92 $76.23 million $0.84 197.23

SBA Communications has higher revenue and earnings than Towerstream. Towerstream is trading at a lower price-to-earnings ratio than SBA Communications, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

96.2% of SBA Communications shares are held by institutional investors. 6.4% of Towerstream shares are held by insiders. Comparatively, 2.4% of SBA Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

SBA Communications beats Towerstream on 10 of the 12 factors compared between the two stocks.

Towerstream Company Profile

Towerstream Corporation is a provider of fixed wireless services to businesses in over 10 urban markets across the United States. The Company operates through Fixed Wireless Services (Fixed Wireless) segment. Its fixed wireless service supports bandwidth on demand, wireless redundancy, virtual private networks, disaster recovery, bundled data and video services. Towerstream installs equipment on the rooftops of the buildings in which the Fixed Wireless segment customers operate and refer to these as Customer Locations. This equipment includes receivers and antennas, and a wireless connection is established between the Customer Location to one or more of its points of presence (PoPs). It provides fixed wireless broadband services to commercial customers and delivers access over a Wireless network transmitting over both regulated and unregulated radio spectrum. It provides services to business customers in various locations, including New York City, Boston, Chicago and Houston.

SBA Communications Company Profile

SBA Communications Corporation is an independent owner and operator of wireless communications tower structures, rooftops and other structures that support antennas used for wireless communications. The Company’s operating segments include site leasing and site development. The site leasing business includes segments, domestic site leasing and international site leasing. The Company’s primary business line is its site leasing business. In its site leasing business, the Company leases antenna space to wireless service providers on towers that it owns or operates, and manages rooftop and tower sites for property owners under various contractual arrangements. The Company owns approximately 25,460 towers. It also manages or leases approximately 5,500 actual or potential towers. The Company’s other business line is its site development business, through which it assists wireless service providers in developing and maintaining their own wireless service networks.

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