Crown Castle Inc.CCINYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $66.80 per share(market-calibrated)

-25.4%

Upside to Fair Value

Current

$89.53

Pure Model

$64.97

Fair Value

$66.80

Bull Case

$94.09

Bear Case

$41.28

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

2.96%

Calibrated Growth

2.62%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $64.97.

What's Driving This Ratingfor CCI

↓

CapEx normalizing toward maintenance

Historical CapEx is 25.17% of revenue (heavy investment phase). Model fades this to 2.50% by Year 10, freeing up ~$1.2B in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 19.88% — below the sector mature average of 48.75%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.4B (27.35% margin).

→

Moderate revenue growth

Analyst consensus projects -4.93% revenue growth, fading to 2.50% by Year 10. Revenue reaches $5.3B (vs $4.3B today).

✓

Model and market roughly agree

Market-implied terminal growth of 2.96% is close to the model's 2.50% (only 46bps apart). The DCF assumptions are well-aligned with how the market is pricing this stock.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 93.44% indicates efficient cash generation. FCF reaches $3.1B by Year 10 (58.56% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.98

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)8.93%

Cost of Debt

Pre-tax Cost of Debt2.70%

Tax Rate5.00%

After-tax Cost of Debt2.56%

Equity Weight (E/V)56.85%

Debt Weight (D/V)43.15%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (56.85% × 8.93%) + (43.15% × 2.56%)

= 6.18%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$4.1B	$4.2B	$4.6B	$4.9B	$5.3B
EBIT	$806M	$830M	$1.0B	$1.2B	$1.4B
Tax	$40M	$42M	$51M	$61M	$72M
NOPAT	$766M	$789M	$967M	$1.2B	$1.4B
+ Depreciation	$1.4B	$1.5B	$1.6B	$1.7B	$1.9B
- Capex	$1.0B	$840M	$701M	$491M	$131M
- Δ NWC	-$21M	$6M	$11M	$12M	$13M
Free Cash Flow	$1.2B	$1.4B	$1.9B	$2.4B	$3.1B
Discount Factor	0.942	0.835	0.741	0.657	0.549
Present Value	$1.1B	$1.2B	$1.4B	$1.6B	$1.7B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$3.1B

Terminal Growth Rate2.50%

WACC6.18%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$85.7B

PV of Terminal Value$47.1B

Exit Multiple Method

Year 10 EBITDA$3.3B

Exit Multiple (EV/EBITDA)22.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$72.5B

PV of Terminal Value$39.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$14.1B

PV of Terminal Value$47.1B

Enterprise Value$61.2B

(-) Net Debt$29.3B

Equity Value$31.9B

Shares Outstanding435M

Price per Share$73.34

Exit Multiple Method

PV of Projected FCFs$14.1B

PV of Terminal Value$39.8B

Enterprise Value$53.9B

(-) Net Debt$29.3B

Equity Value$24.6B

Shares Outstanding435M

Price per Share$56.61

Pure Model Fair Value

$64.97

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.18%	$113.33	$134.26	$138.78	$130.37	$122.35
5.18%	$76.18	$85.77	$98.94	$118.15	$122.35
6.18%	$53.00	$58.27	$64.97	$73.78	$85.88
7.18%	$36.65	$39.87	$43.78	$48.62	$54.78
8.18%	$24.23	$26.35	$28.83	$31.79	$35.38

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$41.28

-53.9% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.23

Base Case

$64.97

-27.4% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.98

Bull Case

$94.09

5.1% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.84

Key Assumptions & Drivers• Real Estate Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-4.93%

Year 3 Revenue Growth1.36%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin19.88%

Terminal EBIT Margin48.75%

Tax Rate5.00%

Historical Capex / Rev25.17%

Terminal Capex / Rev2.50%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 22x EV/EBITDA (Real Estate sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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