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Crown Castle Inc CCI

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Stock XNYS Rating as of
$94.37 +1.32 (1.42%)
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Company Report

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Crown Castle Earnings: Stock Extremely Attractive After Recent Selloff and Boring Quarter

Matthew Dolgin

Crown Castle’s first-quarter results contained no surprises, as they were neatly in line with management’s prior outlook. New investment on towers from mobile carriers has remained muted, and small cell revenue growth has accelerated. However, we’re enthused about the company’s direction following the strategic and operational review of the fiber segment and the installation of a new CEO, Steven Moskowitz, last week. We believe there are numerous opportunities for upside in narrow-moat Crown’s stock, as we’re maintaining our $130 fair value estimate. We attribute the extreme selloff in the past month entirely to the violent spike in interest rates. Crown is likely to remain sensitive to interest rates in the near term, but we see a lot of value being overlooked.

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Price vs Fair Value

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CCI is trading at a 28% discount.
Price
$93.05
Fair Value
$443.00
Uncertainty
Medium
1-Star Price
$484.80
5-Star Price
$85.00
Economic Moat
Bycgzxz
Capital Allocation
Ybp

Bulls Say, Bears Say

Bulls

Crown’s tower business runs on autopilot. It requires very minimal capital spending and is virtually assured of stable growth each year due to contractual rent escalators, and mostly fixed costs.

Bears

Crown is spending too much on small cells, which have fewer competitive advantages and lower margin profiles and returns on investment than towers.

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Trading Information

Previous Close Price
$93.05
Day Range
$92.48–96.48
52-Week Range
$84.72–134.09
Bid/Ask
$94.09 / $98.00
Market Cap
$41.01 Bil
Volume/Avg
4.9 Mil / 2.8 Mil

Key Statistics

Price/Earnings (Normalized)
22.93
Price/Sales
5.84
Dividend Yield (Trailing)
6.73%
Dividend Yield (Forward)
6.73%
Total Yield
6.70%

Company Profile

Crown Castle International owns and leases roughly 40,000 cell towers in the United States. It also owns more than 85,000 route miles of fiber. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company’s fiber is primarily leased by wireless service providers to set up small-cell network infrastructure and by enterprises for their internal connection needs. Crown Castle’s towers and fiber are predominantly located in the largest U.S. cities. The company has a very concentrated customer base, with about 75% of its revenue coming from the big three U.S. mobile carriers. Crown Castle operates as a real estate investment trust.
Sector
Real Estate
Industry
REIT - Specialty
Stock Style Box
Mid Core
Total Number of Employees
5,000
Website
https://www.crowncastle.com

Competitors

Valuation

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Metric
CCI
AMT
SBAC
Price/Earnings (Normalized)
 22.9334.1037.57
Price/Book Value
 6.3919.13—
Price/Sales
 5.847.227.83
Price/Cash Flow
 11.6614.5314.35
Price/Earnings
CCI
AMT
SBAC

Financial Strength

Metric
CCI
AMT
SBAC
Quick Ratio
 0.270.420.30
Current Ratio
 0.400.510.36
Interest Coverage
 2.841.992.22
Quick Ratio
CCI
AMT
SBAC

Profitability

Metric
CCI
AMT
SBAC
Return on Assets (Normalized)
 4.56%4.50%8.37%
Return on Equity (Normalized)
 25.50%60.17%—
Return on Invested Capital (Normalized)
 7.24%7.01%12.89%
Return on Assets
CCI
AMT
SBAC
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