American Tower Stock Rises 18.7% YTD: Is it Too Late to Buy?

Core Viewpoint - American Tower (AMT) has shown strong stock performance, rallying 18.7% year-to-date, outperforming its industry peers and the broader market [1][6][9]. Company Strategy - American Tower is strategically repositioning its portfolio by divesting non-core assets in developing markets to focus on developed markets, which is expected to enhance operational efficiency and returns [2][9]. - The company plans to invest over $600 million in expanding its data center footprint in 2025 to capitalize on the growing demand driven by Artificial Intelligence (AI) and other technologies [8][9]. Financial Performance - In the first quarter of 2025, American Tower reported revenue growth across its property and service operations, despite challenges from the Sprint-T-Mobile merger [3][9]. - The company achieved a year-over-year organic tenant billings growth of 4.7%, with total tenant billings rising 5.2% [7]. Market Position - American Tower operates approximately 149,000 communication sites globally, positioning it well to benefit from the increasing demand for wireless connectivity due to next-generation technologies [7]. - The company maintains solid liquidity with $11.7 billion in total liquidity as of March 31, 2025, and has achieved its net leverage target of 5X EBITDA [10]. Dividend Policy - American Tower has resumed a mid-single-digit dividend growth rate of 4.6% in 2025, reflecting its operational strength and commitment to rewarding shareholders [11]. - Over the past five years, the company has increased its dividend 15 times, with an annualized growth rate of 9.07% [11]. Estimate Revisions - The Zacks Consensus Estimate for adjusted funds from operations (AFFO) per share for 2025 and 2026 has seen positive revisions, indicating bullish sentiment [12]. Valuation - American Tower's stock is trading at a forward 12-month price-to-FFO of 20.85X, which is above the REIT industry average of 15.73X [17]. Analyst Recommendations - The average brokerage recommendation for American Tower is 1.40 on a scale of 1 to 5, with 18 out of 24 brokers rating it a "Strong Buy" [21].