Threat To Pay TV Business Can Negatively Impact Comcast’s Value

• The imminent threat from streaming video, and the consequent cord-cutting, is likely to curb growth in the Pay TV industry going forward. This will put pressure on Comcast’s subscriber count in the next few years.
• The increasing competition will also make it difficult for Comcast to continue to raise rates at a similar pace going forward.
• If Comcast’s Pay TV market share – and overall U.S. Pay TV penetration – decline faster than expected, and the monthly fee per subscriber flattens to $81 going forward, the company’s free cash flow will grow at an annual rate of 3.7% through 2022 (compared to our current CAGR forecast of 4.3%). This translates into a 12% downside to Comcast’s price estimate.

Have more questions about Comcast? See the links below:

• What’s Comcast’s Revenue & EBITDA Breakdown In Terms Of Different Products?
• What’s Comcast’s Fundamental Value Based On Expected 2016 Results?
• How Has Comcast’s Revenue Composition Changed In The Last Five Years?
• What Has Led To A ~70% Increase In Comcast’s Revenues & EBITDA In The Last Five Years?
• By What Percentage Can Comcast’s Revenues Grow Over the Next Five Years?
• How Are Comcast’s Revenue & EBITDA Composition Expected To Change By 2020?

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