Comcast Corporation (CMCSA - Get Rating) is a media and technology company. Its Cable Communications segment consists of the operations of Comcast Cable, which provides broadband, video, voice, and other services under the XFINITY brand. Its Media segment consists of television and streaming platforms. Its Studios segment consists of film and television studio production and distribution operations. The company has three primary businesses: Comcast Cable, NBCUniversal, and Sky.

CMCSA reported impressive fiscal first-quarter results, beating Wall Street estimates for sales and adjusted EPS by 1.9% and 6.8%, respectively.

However, the stock has declined 22.6% in price over the past six months and 29.5% over the past year to close the last trading session at $39.76. The stock is down 35.6% from its 52-week high of $61.80, which it hit on September 3, 2021.

Here’s what could influence CMCSA’s performance in the upcoming months:

Robust Financials

CMCSA’s revenue for the fiscal first quarter ended March 31, 2022, increased 13.9% year-over-year to $31.01 billion. The company’s adjusted net income increased 10.5% year-over-year to $3.90 billion. Also, its adjusted EBITDA increased 8.7% year-over-year to $9.15 billion. In addition, its adjusted EPS came in at $0.86, representing an increase of 13.1% year-over-year.

Favorable Analyst Estimates

CMCSA’s EPS for fiscal 2023 is expected to increase 11.8% year-over-year to $3.99. Its revenue for fiscal 2022 is expected to increase 5.3% year-over-year to $122.50 billion. It surpassed Street EPS estimates in each of the trailing four quarters. Its EPS is expected to increase 13.4% per annum over the next five years.

Discounted Valuation

In terms of forward EV/EBITDA, CMCSA’s 7.26x is 15.6% lower than the 8.61x industry average. Its forward non-GAAP P/E of 11.08x is 36.1% lower than the 17.35x industry average. Also, the stock’s 0.79x forward non-GAAP PEG is significantly lower than the 1.32x industry average.

High Profitability

In terms of trailing-12-month EBIT margin, CMCSA’s 17.76% is significantly higher than the 9.57% industry average. Likewise, its 29.40% trailing-12-month EBITDA margin is 47.5% higher than the industry average of 19.92%. Furthermore, the stock’s trailing-12-month ROCE, ROC, and ROA came in at 15.36%, 6.68%, and 5.25%, compared to the industry averages of 7.05%, 3.89%, and 3%, respectively.

POWR Ratings Show Promise

CMCSA has an overall rating of B, which equates to a Buy in our POWR Ratings system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. CMCSA has a B grade for Quality. This is justified given its 66.64% trailing-12-month gross profit margin compared to the 50.93% industry average.

CMCSA also has a B grade for Stability, consistent with its 0.93 beta.

CMCSA is ranked first out of nine stocks in the Entertainment – TV & Internet Providers industry. Click here to access CMCSA’s Growth, Value, Momentum, and Sentiment ratings.

Bottom Line

CMCSA possesses robust financials, higher-than-industry profitability, and decent revenue and earnings growth prospects. So, we think it could be wise to buy the dip in the stock.

How Does Comcast Corporation (CMCSA) Stack Up Against its Peers?

CMCSA has an overall POWR Rating of B, equating to a Buy rating. This rating is superior to its peers within the Entertainment – TV & Internet Providers industry, such as Charter Communications, Inc. (CHTR - Get Rating), Altice USA, Inc. (ATUS - Get Rating), and Cable One, Inc. (CABO - Get Rating), which are all rated C (neutral).

CMCSA shares rose $0.14 (+0.35%) in premarket trading Monday. Year-to-date, CMCSA has declined -20.16%, versus a -13.16% rise in the benchmark S&P 500 index during the same period.

About the Author: Dipanjan Banchur

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...

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