At $42.44, Is Comcast Corporation (NASDAQ:CMCS.A) A Buy?
Today we’re going to take a look at the well-established Comcast Corporation (NASDAQ:CMCS.A). The company’s stock saw a significant share price rise of over 20% in the past couple of months on the NasdaqGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Comcast’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Comcast
What’s the opportunity in Comcast?
According to my valuation model, Comcast seems to be fairly priced at around 19% above my intrinsic value, which means if you buy Comcast today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $35.66, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Comcast’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Comcast?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Comcast’s earnings over the next few years are expected to increase by 27.85%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in Comcast’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on Comcast, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Comcast. You can find everything you need to know about Comcast in the latest infographic research report. If you are no longer interested in Comcast, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
