Why Comcast Stock Looks Set To Rebound

CMCSA: Comcast logo

Comcast (NASDAQ:CMCSA) stock has declined by almost 14% over the past month (about 21 trading days) underperforming the broader S&P 500 which remains down by about 11% over the same period. While the broader markets have been weighed down by concerns of a recession, as the Federal Reserve and global central banks continue their path of interest rate hikes, there are specific factors hurting Comcast. Comcast’s bread and butter broadband business has stagnated, with the company adding no net subscribers over Q2 2022 (the most recently reported quarter), as the demand seen through the Covid pandemic cooled off, just as competition from fixed-wireless broadband services from wireless carriers has been mounting. For example, T-Mobile topped the broadband industry adding 560,000 subscribers over the most recent quarter. Although it isn’t likely that wireless carriers can truly challenge cable-based providers in the long run, given that wireless capacity is more limited, investors are nevertheless concerned about Comcast’s recent loss of momentum.

Given that CMCSA stock is down 14% over the last month, will it continue its downward trajectory, or is a recovery imminent? Going by historical performance, there is a roughly 68% chance of a rise in CMCSA stock over the next monthOut of 50 instances in the last ten years that CMCSA stock saw a twenty-one-day decline of 14% or more, 34 of them resulted in CMCSA stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 34 out of 50, or a 68% chance of a rise in CMCSA  stock over the coming month. See our analysis on Comcast Stock Chance of A Rise for more details.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years data

  • After moving -8% or more over a five-day period, the stock rose in the next five days on 50% of the occasions.
  • After moving -10% or more over a ten-day period, the stock rose in the next ten days on 53% of the occasions.
  • After moving -14% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 68% of the occasions.
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  4. What To Expect From Comcast’s Q3 Results?
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  6. What To Expect From Comcast’s Q2 Results

This pattern suggests that there is a reasonable chance of a rise in CMCSA stock in the near term.

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Returns Sep 2022
MTD [1]
YTD [1]
Total [2]
 CMCSA Return -12% -37% -54%
 S&P 500 Return -7% -23% 65%
 Trefis Multi-Strategy Portfolio -11% -25% 198%

[1] Month-to-date and year-to-date as of 9/26/2022
[2] Cumulative total returns since the end of 2016

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