Comcast Corporation (CMCSA - Get Rating) operates as a media and technology company worldwide. It operates through Cable Communications; Media; Studios; Theme Parks; and Sky segments.

On September 5, 2022, SkyShowtime, a joint venture of CMCSA, announced that it would officially launch on September 20, 2022. SkyShowtime will bring its phenomenal offering of exclusive and iconic entertainment to millions across Europe for the very first time.

Moreover, on August 25, 2022, CMCSA announced the expansion of its fiber-rich network in Spring Hill to boost broadband connectivity and enhance its service with fast, reliable Internet service.

CMCSA has lost 5.1% over the past month and 29% year-to-date to close the last trading session at $34.89. It has lost 42.1% over the past year. However, Wall Street analysts expect the stock to hit $46.18 in the near term, indicating a potential upside of 32.3%.

Here is what could shape CMCSA’s performance in the near term:

Solid Financials

CMCSA’s revenue came in at $30.02 billion for the second quarter that ended June 30, 2022, up 5.1% year-over-year. Its operating income came in at $6.37 billion, up 15.6% year-over-year. Also, its adjusted EBITDA came in at $9.83 billion, up 10.1% year-over-year.

Furthermore, its adjusted net income came in at $4.51 billion, up 14.3% year-over-year, while its adjusted EPS came in at $1.01, up 20.2% year-over-year.

Mixed Valuations

CMCSA’s forward EV/EBITDA of 6.78x is 15% lower than the industry average of 7.97x. Its forward P/Cash Flow of 5.65x is 33.6% lower than the industry average of 8.51x. Moreover, its forward non-GAAP P/E of 9.94x is 40.1% lower than the industry average of 16.60x.

However, its forward EV/S of 2.06x is 2.9% higher than the industry average of 2.01x, and its forward P/S of 1.30x is 2.4% higher than the industry average of 1.27x.

Robust Profitability Margins

CMCSA’s trailing-12-month gross profit margin of 67.34% is 33.3% higher than the industry average of 50.52%. Its trailing-12-month EBITDA margin of 29.82% is 54.4% higher than the industry average of 19.31%, while its trailing-12-month net income margin of 11.54% is 98.9% higher than the industry average of 5.80%.

In addition, its trailing-12-month ROCE, ROTC, and ROTA of 15.06%, 7.07%, and 5.26%, compared with the industry averages of 6.66%, 3.58%, and 2.48%, respectively.

POWR Ratings Reflect Promising Outlook

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

It has a B grade for Quality, consistent with its higher-than-industry profitability margins.

The stock has a C grade for Value, in sync with its mixed valuation multiples.

In the 9-stock Entertainment – TV & Internet Providers industry, CMCSA is ranked first.

Click here for the additional POWR Ratings for CMCSA (Growth, Momentum, Stability, and Sentiment).

View all the top stocks in the Entertainment – TV & Internet Providers industry here.

Bottom Line

The company has registered stable growth in the last reported quarter. Moreover, CMCSA’s revenue and EPS are expected to grow 4.6% and 11.1% year-over-year to $121.72 billion and $3.59 in 2022, respectively. Given its robust fundamentals and significant upside potential, I think CMCSA could be an ideal addition to your portfolio now.

CMCSA shares were trading at $35.13 per share on Tuesday morning, down $0.63 (-1.76%). Year-to-date, CMCSA has declined -28.98%, versus a -16.64% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...

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