CCI - Embedded Expectations Analysis - 2020 11 06
Crown Castle International Corp. (REIT) (CCI:USA) currently trades above recent averages relative to UAFRS-based (Uniform) earnings, with a 45.6x UAFRS-based P/E, implying bullish expectations for the firm. However, management may have concerns about capital investments, yields on invested capital, and small cells activitySpecifically, management may lack confidence in their ability to effectively allocate the remaining capital in small cell and fiber investments, maintain investment at desired initial yield on invested capital in fiber solutions, and produce the expected ramp in small cell activity throughout 2024. Furthermore, they may be concerned about the node density needed for 5G, and they may be overstating the capabilities of markets with existing fibers. Additionally, management may have concerns about the sustainability of request for proposals in the market, their inability to offer a shared carrier solution everywhere in the US, and the nature of carriers awarding small cell nodes in large bulks
Crown Castle International is a holding company. Through its subsidiaries, the company owns, operates and leases shared communications infrastructure that is geographically dispersed throughout the U.S., including towers and other structures, such as rooftops (collectively, towers), and fiber primarily supporting small cell networks (small cells) and fiber solutions. The company's towers, fiber and small cells assets are collectively referred to herein as communications infrastructure. The company's core business is providing access, including space or capacity, to its shared communications infrastructure via long-term contracts in various forms, including lease, license, sublease and service agreements.
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