Crown Castle Stock Gains 13% Year to Date: Will the Trend Last?

Crown Castle CCI shares have risen 13% year to date, outperforming the industry's upside of 3.7%.

Crown Castle’s efforts to augment its tower business bode well for growth amid rising wireless connectivity usage. As wireless data consumption is expected to rise significantly over the next few years, service providers are likely to continue their network expansion and densification efforts to meet the demand.

Moreover, long-term leases from tenants assure steady revenues for CCI. A healthy balance sheet is likely to support its growth endeavors.

Factors Behind CCI Stock Price Surge: Will the Trend Last?

Crown Castle’s unmatched portfolio of more than 40,000 towers in each of the top 100 basic trading areas of the United States (as of the first quarter of 2025) positions it well to capitalize on the growing network investments by carriers on the back of higher availability of spectrum and deployment of 5G networks at scale. In the first quarter of 2025, excluding the impact of Sprint Cancellations, the company reported 5% consolidated organic growth, which was driven by an increase in demand across its portfolio of tower businesses.

Crown Castle has long-term tower lease agreements with top U.S. carriers, which contribute to recurring site rental cash flows over the long term. The long-term leases enable the company to enjoy recurring revenues that provide top-line stability, while contracted rent escalators on the majority of its revenues offer embedded growth. Moreover, a strong and creditworthy tenant base adds resiliency to its business.

Crown Castle has sufficient liquidity and a decent balance sheet position. The company exited the first quarter of 2025 with cash and cash equivalents of $60 million. As of March 31, 2025, the net debt to last quarter annualized adjusted EBITDA was 5.9X. After closing the fiber segment business, the company expects to use substantial cash proceeds to repay debt.

As of March 31, 2025, CCI had $7 billion of undrawn amount available under its senior unsecured revolving credit facility. Further, as of the end of the first quarter of 2025, Crown Castle enjoyed investment-grade credit ratings of BBB, BBB+ and Baa3 from Standard & Poor’s, Fitch and Moody’s, respectively, facilitating access to debt markets on attractive terms.

Key Risks for CCI Stock

Crown Castle’s top-line growth is likely to be affected by the consolidation in the wireless industry. High customer concentration and elevated interest expenses are other key concerns.

Analysts seem bearish on this tower REIT, carrying a Zacks Rank #3 (Hold), with the Zacks Consensus Estimate for its 2025 FFO per share being revised southward by 9.3% over the past two months to $4.18.

Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Digital Realty Trust DLR and SBA Communications SBAC, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for DLR’s full-year FFO per share is pegged at $7.03, being revised southward marginally over the past two months.

The Zacks Consensus Estimate for SBAC’s 2025 FFO per share is pegged at $12.74, moving marginally northward over the past two months.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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