AD Stock Forecast & Price Target

Array Digital Infrastructure has demonstrated significant growth potential, evidenced by a 125% year-over-year increase in colocation applications and a corresponding 79% rise in rental revenues, amounting to $45.8 million. Management anticipates that both base and bull-case scenarios for tower operations will yield sustained revenue growth of approximately 3% or more while potentially achieving an EBITDA margin of 50% earlier than projected. Furthermore, the company's strategic retention of C-band spectrum and ownership of 4,400 wireless towers position it favorably to capitalize on the anticipated increase in network spending by major carriers seeking to enhance capacity and rural coverage.

Array Digital Infrastructure is projected to experience a decline in net revenue growth, anticipated to reach approximately 5% by 2026. The company's outlook is further hampered by expected reductions in future equity income, which is estimated to fall to around $150 million from the previously forecasted $160 million. Additionally, unfavorable outcomes related to T-Mobile’s selection of towers may impede the company's ability to achieve its target of 50% EBITDA margins, while competition from peers and satellite services threatens the stability of its rural portfolio.