Comcast (NASDAQ:CMCSA) is poised to report its Q1 2023 results on April 27. We expect Comcast’s earnings to come in at about $0.83 per share, slightly ahead of consensus estimates. We project that revenue will stand at about $29.5 billion, roughly in line with consensus estimates. So what are some of the key trends that are likely to drive the company’s earnings? See our interactive dashboard analysis on Comcast Earnings Preview for more details on how Comcast’s revenues and earnings are likely to trend for the quarter.
Comcast’s bread-and-butter broadband Internet business has seen softness in recent quarters. For example, over Q4 2022, excluding the impact of hurricanes, the company said that it added just about 4,000 broadband customers. There have been a couple of trends impacting the business. Firstly, the boom witnessed through the Covid-19 pandemic and the remote working and learning trend has cooled off. Moreover, competition has been mounting from fixed wireless broadband players, who offer more flexibility and affordable rates. Wireless major T-Mobile actually added the most broadband subscribers last year. Although we don’t expect this trend to continue in the long run, given that wireless capacity is more limited compared to Comcast’s wireline broadband, the trend could continue to impact Comcast in the near term.
While Comcast’s cable TV business is also likely to bleed subscribers, as the secular trend of cord-cutting continues, the company’s fledgling wireless services operations – which operate on the Verizon network and use the Xfinity brand name- are likely to remain a bright spot for the company. Xfinity Mobile added 365,000 subscribers over Q4 2022, bringing its total wireless customer count to more than 5.3 million.
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On the media front, we expect the performance of the company’s NBCUniversal business to be a mixed bag. While we expect the theme park business to remain strong, the Peacock streaming business could continue to bleed cash. Moreover, it’s possible that advertising-related revenues could face some pressure due to high inflation and weaker spending by marketers.
So is Comcast stock worth a look? At the current market price of roughly $38 per share, Comcast trades at just about 10x consensus 2022 earnings. Although there are near-term headwinds for the stock, Comcast has the potential to expand its earnings per share driven by share repurchases and margin expansion for the cable communication business via cost and efficiency improvements. We value Comcast stock at about $45 per share, about 20% ahead of the market price. See our analysis of Comcast Valuation for a closer look at what’s driving our price estimate for the company and how Comcast compares with its peers. Also, see our analysis of Comcast Revenue for more details on the company’s key revenue streams and how they have been trending.
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