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Crown Castle (CCI)
NYSE:CCI
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Crown Castle
(NYSE:CCI)63Neutral
Positive Factors
Small Cell Growth
The company still has 40k nodes in the backlog and 65-70k nodes on air, indicating resilience in its small cell growth target.
Strategic Sale
Crown Castle is in discussions with Zayo for the potential sale of its fiber business at a valuation of more than $8 billion.
Negative Factors
Dividend Concerns
The potential for a dividend cut due to the loss of AFFO from the Fiber business is a concern for investors.
Crown Castle (CCI) vs. S&P 500 (SPY)
Market Cap
$41.37B
Dividend Yield6.58%
Average Volume (3M)2.53M
Price to Earnings (P/E)33.8
Beta (1Y)0.55
Revenue Growth-6.76%
EPS Growth-21.14%
CountryUS
Employees4,700
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)2.82
Shares Outstanding434,598,200
10 Day Avg. Volume2,760,084
30 Day Avg. Volume2,525,640
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.27
Price to Cash Flow (P/CF)14.80
P/FCF Ratio16.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$98.75Price Target Upside1.04% Upside
Rating ConsensusHold
Number of Analyst Covering8
Crown Castle Business Overview & Revenue Model
Company DescriptionCrown Castle International Corp. (CCI) is a leading American provider of shared communications infrastructure. The company operates across the United States, focusing on the development, ownership, and operation of cell towers, small cell solutions, and fiber optic networks. Crown Castle's infrastructure supports wireless communications and connectivity, enabling mobile network operators and other enterprises to deploy their services effectively.
How the Company Makes MoneyCrown Castle makes money primarily through leasing its communications infrastructure to wireless service providers and other customers. Its key revenue streams include long-term leasing agreements for cell towers, which generate consistent, recurring income. Additionally, Crown Castle earns revenue from small cell solutions and fiber services, which cater to the growing demand for high-speed data transmission and enhanced network coverage. The company's significant partnerships with major telecommunications companies ensure a stable and diversified income base, bolstered by the rising need for 5G deployment and digital connectivity across urban and suburban areas.
Crown Castle Financial Statement Overview
Summary
Crown Castle exhibits strong profitability and efficient cash generation, with a solid gross profit margin and impressive EBIT and EBITDA margins. However, declining revenue growth and high leverage pose potential risks.Income Statement
Crown Castle's income statement shows a solid performance with a gross profit margin of 72.6% and a net profit margin of 18.6% for TTM. The company's EBIT and EBITDA margins are 32.9% and 60.6%, respectively, indicating strong operational efficiency. However, the revenue has slightly decreased by 5.6% from the previous year, suggesting potential challenges in revenue growth.78
Positive
Balance Sheet
The balance sheet reveals a debt-to-equity ratio of 5.6, highlighting high leverage, which is typical in the REIT industry but poses a risk if interest rates rise. The return on equity stands at 23.2% (TTM), which is impressive. However, the equity ratio is relatively low at 13.9%, suggesting heavy reliance on debt financing.70
Positive
Cash Flow
Crown Castle's cash flow statement shows an operating cash flow to net income ratio of 2.4, which is strong, indicating effective cash generation capabilities. The free cash flow to net income ratio is 1.3, showing positive free cash flow generation. However, the free cash flow growth rate has declined by 4.2% compared to the previous year, indicating potential concerns in future cash flow sustainability.65
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.59B | 6.98B | 6.99B | 6.34B | 5.84B | 5.77B | Gross Profit |
| 4.79B | 5.00B | 4.92B | 4.35B | 3.89B | 3.79B | EBIT |
| 2.17B | 2.37B | 2.46B | 2.02B | 1.60B | 1.59B | EBITDA |
| 3.92B | 4.20B | 4.17B | 3.67B | 3.19B | 3.16B | Net Income Common Stockholders |
| 1.23B | 1.50B | 1.68B | 1.10B | 1.06B | 747.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 125.00M | 105.00M | 156.00M | 292.00M | 232.00M | 196.00M | Total Assets |
| 38.23B | 38.53B | 38.92B | 39.04B | 38.77B | 38.46B | Total Debt |
| 29.12B | 28.81B | 27.96B | 27.01B | 25.42B | 23.93B | Net Debt |
| 29.00B | 28.71B | 27.80B | 26.72B | 25.18B | 23.73B | Total Liabilities |
| 32.18B | 32.15B | 31.47B | 30.78B | 29.31B | 27.97B | Stockholders Equity |
| 6.05B | 6.38B | 7.45B | 8.26B | 9.46B | 10.50B |
| Cash Flow | Free Cash Flow | ||||
| 1.63B | 1.70B | 1.57B | 1.50B | 1.43B | 641.00M | Operating Cash Flow |
| 2.93B | 3.13B | 2.88B | 2.73B | 3.06B | 2.70B | Investing Cash Flow |
| -1.31B | -1.52B | -1.35B | -1.33B | -1.74B | -2.08B | Financing Cash Flow |
| -1.54B | -1.65B | -1.67B | -1.31B | -1.27B | -692.00M |
Crown Castle Technical Analysis
Positive
97.73
Price Trends
90.34
Positive
96.85
Positive
100.54
Negative
Market Momentum
1.50
Negative
67.13
Neutral
71.58
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCI, the sentiment is Positive. The current price of 97.73 is above the 20-day moving average (MA) of 92.13, above the 50-day MA of 90.34, and below the 200-day MA of 100.54, indicating a neutral trend. The MACD of 1.50 indicates Negative momentum. The RSI at 67.13 is Neutral, neither overbought nor oversold. The STOCH value of 71.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CCI.
Crown Castle Risk Analysis
Crown Castle disclosed 28 risk factors in its most recent earnings report. Crown Castle reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Crown Castle Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $49.96B | 92.03 | 2.98% | 3.29% | 1.42% | -42.07% | |
73 Outperform | $96.73B | 42.96 | 91.38% | 3.13% | -3.05% | 51.74% | |
73 Outperform | $48.78B | 35.79 | 245.32% | 0.83% | 11.64% | -23.54% | |
73 Outperform | $23.72B | 31.78 | -14.67% | 1.79% | -1.18% | 50.21% | |
70 Outperform | $84.86B | 102.52 | 6.27% | 2.00% | 6.84% | -17.14% | |
63 Neutral | $41.37B | 33.77 | 20.49% | 6.58% | -6.76% | -21.14% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% |
* Real Estate Sector Average
Performance Comparison
CCI
Crown Castle
97.73
-8.06
-7.62%
AMT
American Tower
212.29
12.31
6.16%
COR
Cencora
254.58
19.02
8.07%
DLR
Digital Realty
149.17
8.09
5.73%
EQIX
Equinix
859.52
-15.97
-1.82%
SBAC
SBA Communications
223.73
4.06
1.85%
Crown Castle Earnings Call Summary
Earnings Call Date: Oct 16, 2024 | % Change Since: -14.16% | Next Earnings Date: Mar 12, 2025
Earnings Call Sentiment Neutral
Crown Castle's earnings call highlighted strengthened financial performance and strategic adjustments, including reaffirmation of growth targets and cost-saving initiatives. However, challenges in the small cell segment and a lowered net income outlook present areas of concern.Highlights
Reaffirmation of 2024 Financial Outlook
Crown Castle reaffirms its full-year 2024 outlook for adjusted EBITDA and AFFO, expecting consolidated organic revenue growth of approximately 5%.
Strong Segment Performance
Reported growth includes 4.5% in towers, 10% in small cells, and 2% in fiber solutions, validating their ability to deliver consistent growth.
Reduction in Net Debt to EBITDA
Crown Castle reduced leverage to 5.5x net debt to EBITDA from 5.9x, demonstrating improved financial stability.
Successful Cost Reduction Initiatives
The company achieved $65 million in operating cost reductions, exceeding the $60 million forecast.
Significant Capital Expenditure Savings
Canceling 7,000 nodes saves about $800 million in future capital expenditures, improving the risk-return profile of their backlog.
Lowlights
Lowered Net Income Outlook for 2024
The 2024 outlook for net income was lowered due to a $125 million to $150 million asset write-off related to reductions in the small cell business.
Impact of Node Cancellations
Approx. 7,000 contracted small cell nodes were canceled, which could impact future growth expectations despite improved return profiles.
Challenging Market Conditions
Continued challenges include zoning and permitting delays, impacting deployment timelines and project costs.
Company Guidance
During the third quarter 2024 earnings call for Crown Castle, the company reaffirmed its full-year guidance for adjusted EBITDA and AFFO, projecting consolidated organic revenue growth of approximately 5%. This growth includes a 4.5% increase in towers, 10% in small cells, and 2% in fiber solutions. Despite a reduction in the 2024 net income outlook due to a $125 million to $150 million anticipated asset write-off, the company expects strong performance from its 40,000-node small cell backlog, with more than 70% being colocation nodes. Crown Castle reported third-quarter consolidated organic growth of 5.2%, with towers contributing 4.3%, small cells 25% (including $15 million in nonrecurring revenues), and fiber solutions 1%. Adjusted EBITDA increased by 3% year-over-year, and the leverage ratio decreased to 5.5x net debt to EBITDA. For the full year, Crown Castle anticipates deploying 11,000 to 13,000 new revenue-generating nodes, maintaining discretionary capital expenditures between $1.2 billion and $1.3 billion.Crown Castle Corporate Events
Dividends
Crown Castle Declares Quarterly Dividend for Shareholders
Neutral
Nov 6, 2024
Crown Castle Inc. has announced a quarterly cash dividend of $1.565 per share, payable on December 31, 2024, to shareholders on record as of December 13, 2024. With a vast network of over 40,000 cell towers and 90,000 miles of fiber across major U.S. markets, Crown Castle is a key player in communications infrastructure, supporting vital data and wireless services.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.