Most stocks have lost ground this year, leaving many to trade at much more attractive valuations. That's certainly the case for American Tower (AMT -0.48%).

Despite this year's headwinds, the global tower and data center operator has continued to grow its cash flow. With its share price falling, it's beginning to look like a bargain, especially given the dual growth catalysts it sees ahead.

Standing tall amid the headwinds

American Tower faced its share of challenges in the third quarter. Despite those issues, the infrastructure REIT's total revenue rose 8.8%. It benefited from last year's acquisition of data center REIT CoreSite and continued organic tenant billings growth, which came in at 2.6% in the period.  

However, the REIT's adjusted funds from operations (FFO) declined by 5.3% per share in the period. That's partly due to a higher share count as it sold stock to fund the CoreSite deal and the impact of foreign exchange headwinds. Meanwhile, collections from one of its customers in India fell short of what it billed them, while Sprint canceled some leases following its merger with T-Mobile

Despite these headwinds, American Tower expects its full-year adjusted FFO to grow a range of $9.57 to $9.74 per share, a 2.3% increase from 2021 at the mid-point. With its stock price tumbling to below $200 a share, it trades at around 21 times its adjusted FFO. That's significantly cheaper than the more than 28 FFO multiple it fetched at the beginning of this year. It looks like a bargain for a company with American Tower's long-term growth potential.

Two big long-term growth catalysts

CEO Tom Bartlett discussed the company's growth drivers on the accompanying conference call:

Since the start of 2019, 5G spectrum auctions, mainly in the mid band, have collectively driven over $155 billion in purchase price proceeds across our served market. These acquisitions of large swaths of new spectrum have kicked off what we believe will be at least a decade-long period of network investments, aimed at delivering on the promises of 5G's faster and lower latency applications. We anticipate this will result in $5 billion of incremental annual customer capex spend in the United States, on average, as compared to the levels we saw throughout the 4G cycle.

As Bartlett pointed out, the massive investment to buy spectrum will lead mobile carriers to invest more money in building out 5G networks over the next decade. That has already caused T-Mobile, AT&TDISH Networks, and Verizon to new sign master lease agreements with American Tower over the past year to support this next investment phase. Those "investments will drive a near-term acceleration in organic new business growth and a sustained level of elevated tower activity over a multi-year period."

Bartlett also noted on the call that "the most apparent opportunity of scale that we see over the next decade is out of the mobile edge," a network architecture that enables cloud computing at the edge of a cellular network. This opportunity led the company to acquire CoreSite. It sees significant potential to deploy solutions that connect its towers to data centers and provide mobile edge solutions to customers. Bartlett stated, "the edge will represent a meaningful opportunity to drive incremental value to our assets over the long term." 

These catalysts should drive growth for American Tower over the coming decade. It will be able to add more tenants to its existing tower, build additional sites, and expand its data center footprint. These investments should enable American Tower to accelerate adjusted FFO growth as its current headwinds fade, and those tailwinds pick up speed.

A compelling long-term opportunity

4G was a powerful growth driver for American Tower over the last decade. The infrastructure REIT grew its AFFO and dividend at a double-digit annual pace as it helped mobile carriers support that network expansion.

While it's currently facing some near-term headwinds, it sees two big tailwinds in 5G and mobile edge driving accelerated growth over the next decade. That makes this year's sell-off in its stock look like a bargain, given all the growth that still lies ahead.