Radius Global Infrastructure Inc: Ignored 5G Landlord Poised to Rise in 2021

Radius Global Infrastructure Stock Could Double in 2021

Radius Global Infrastructure Inc (NASDAQ:RADI) is not so much an overlooked 5G stock as it is a newly listed 5G stock. The company, formerly known as Digital Landscape Group, Inc., changed its name, moved its headquarters from the U.K. to New York City, and began trading on the Nasdaq in early October 2020.

Radius Global Infrastructure stock has done well since then, advancing roughly 50%, but it’s just getting started, and it could double from its current level of around $13.00 by the end of 2021.

RADI Stock Overview

Radius Global Infrastructure, through its subsidiary APWireless Infrastructure Partners, LLC, is a 5G real estate landlord.

The company acquires ground, rooftop, and other types of property underlying cell sites and other critical telecom operations. It then rents out the land and gets a steady, monthly revenue stream from wireless network operators and tower companies. (Source: “Investor Presentation: November 2020,” Radius Global Infrastructure Inc, last accessed January 7, 2021.)

Radius Global Infrastructure owns approximately 5,000 sites and has roughly 6,600 lease streams in 19 countries. Almost quarter of the APWireless portfolio is located in North America, 58% of its portfolio is located in Europe, and 19% is in South America.

APWireless’ triple-net leases are generally low-risk and originated at attractive unlevered yields with favorable lease characteristics, and gross profit margin of greater than 99%.

Radius Global Infrastructure Inc has a long list of compelling growth statistics. Between 2014 and 2019, its revenue expanded at a compound annual growth rate (CAGR) of 27%. Not even COVID-19 could undermine the growth; between the third quarter of 2019 and third quarter of 2020, the company’s revenue grew at a CAGR of 21%.

Between 2014 and 2019, the number of sites that the company acquired expanded at a CAGR of 29%. And from the third quarter of 2019 to the third quarter of 2020, the CAGR was 22%. Over the same time frame, the number of contractual lease streams expanded at a CAGR of 27% and 20%, respectively.

There’s no reason to believe that this kind of growth is going to slow down any time soon. Thanks to the explosive growth in 5G data usage, the need for strategically located digital assets—and their underlying real estate—has never been greater.

Strong Third-Quarter Results

In November 2020, Radius Global Infrastructure announced that its revenue for the third quarter increased 28% year-over-year to $17.9 million. (Source: “Radius Global Infrastructure Reports Third Quarter 2020 Results,” Radius Global Infrastructure Inc, November 16, 2020.)

Gross profit was up 26% year-over-year at $17.7 million. The company reported a third-quarter net loss of $41.8 million, or a loss of $0.66 per share.

Revenue advanced 21% year-to-date to $49.6 million, while gross profit increased 20% year-to-date to $49.2 million.

Annualized in place rents increased 21% to $68.9 million. During the first nine months of 2020, the company’s investments in real property interests and related intangibles were up 59%, at $77.9 million.

Analyst Take

Radius Global Infrastructure Inc is a great 5G company that saw its business continue to thrive during the coronavirus pandemic.

The company’s stable portfolio of cash flow streams provides a balance of yield and growth for essential 5G wireless and telecom infrastructure, and positions it for continued strong global growth. That bodes well for Radius Global Infrastructure stock.