What Every Investor Must Know About CMCSA Stock

Today we're going to take a closer look at large-cap Telecommunications company Comcast, whose shares are currently trading at $42.09. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Comcast Corporation operates as a media and technology company worldwide. The company belongs to the Telecommunications sector, which has an average price to earnings (P/E) ratio of 18.85 and an average price to book (P/B) ratio of 3.12. In contrast, Comcast has a trailing 12 month P/E ratio of 11.7 and a P/B ratio of 2.07.

Comcast's PEG ratio is 1.38, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.

Increasing Revenues but Narrowing Margins:

2018 2019 2020 2021 2022 2023
Revenue (MM) $94,507 $108,942 $103,564 $116,385 $121,427 $120,605
Gross Margins 20% 19% 17% 18% 12% 12%
Operating Margins 20.0% 19.0% 17.0% 18.0% 12.0% 12.0%
Net Margins 13.0% 12.0% 10.0% 12.0% 4.0% 5.0%
Net Income (MM) $11,862 $13,323 $10,701 $14,159 $5,370 $6,507
Net Interest Expense (MM) $3,542 $4,567 $4,588 $4,281 $3,896 $3,943
Depreciation & Amort. (MM) $8,281 $8,663 $8,320 $13,804 $13,821 $14,050
Earnings Per Share $2.56 $2.89 $2.31 $3.04 $1.21 $1.71
Diluted Shares (MM) 4,640 4,610 4,624 4,654 4,430 3,800
Free Cash Flow (MM) $14,523 $15,744 $15,558 $19,972 $15,787 $15,821
Capital Expenditures (MM) $9,774 $9,953 $9,179 $9,174 $10,626 $11,434
Net Current Assets (MM) -$21,084 -$21,665 -$20,277 -$25,161 -$26,456 -$28,283
Long Term Debt (MM) $107,345 $97,765 $100,614 $92,718 $93,068 $94,972
Net Debt / EBITDA 3.95 3.25 3.63 2.54 3.3 3.41

Comcast has slimmer gross margins than its peers, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company has growing revenues and a flat capital expenditure trend working in its favor. Furthermore, Comcast has average net margins with a negative growth trend and irregular cash flows.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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