Analyst Note
| Matthew Dolgin, CFA |Crown Castle’s fourth-quarter revenue came in slightly below our forecast, while its adjusted EBITDA margin, after normalizing for several one-time items, came in right on our target. More notably, the firm announced a sizable small-cell agreement with Verizon and a material small-cell cancellation by T-Mobile to reverse a prior Sprint agreement, which led to T-Mobile making a substantial one-time payment to fulfill contractual obligations. None of the news was particularly surprising or changes our forecast, although the size of the Verizon commitment is slightly larger than we would have expected and could be seen as encouraging for the longer-term viability of Crown’s small-cell business, which we have been very negative on. Even so, we believe Crown is overvalued, and we don’t expect to materially raise our $94 fair value estimate.