Comcast (NASDAQ:CMCSA) is poised to report its Q2 2023 results on July 27. We expect Comcast’s earnings to come in at $0.98 per share, marginally ahead of consensus estimates. We project that revenue will stand at about $30.20 billion, roughly in line with consensus estimates and about flat versus last year. 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 a lackluster performance in recent quarters. For example, over Q1 2023, Comcast added just 5,000 broadband customers in total, compared to about 264,000 in the year-ago quarter. The slowdown comes as the boom witnessed through the Covid-19 pandemic and the remote working and learning trend has eased off. Moreover, competition has been mounting from fixed wireless broadband players, who offer more flexibility and affordable rates. While Comcast’s cable TV business is also likely to fare poorly, 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 had a total of 5.67 million wireless customers at the end of Q1, adding 355,000 users for the quarter. 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, it’s likely that advertising-related revenues could face some pressure, although things could improve from Q1 levels as inflation has been easing.
So is Comcast stock worth a look? At the current market price of roughly $42 per share, Comcast trades at just about 11x consensus 2023 earnings. Although there remain near-term headwinds for the stock, including a weak ad market and slowing growth in the broadband space, 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 $44 per share, slightly 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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