Comcast Stock’s Growth Prospects and Valuation

Comcast (CMCSA) stock is currently trading at 13.84x its fiscal 2019 estimated EPS of $3.07. It’s also trading at 12.47x its fiscal 2020 estimated EPS of $3.40. Analysts expect its adjusted EPS to rise 20.4% in fiscal 2019 and 10.7% in fiscal 2020.

Comcast’s earnings are also expected to rise at a compound annual growth rate of 10.3% in the next five years. However, Comcast’s revenues are expected to increase 16.0% in fiscal 2019 and 5.4% in fiscal 2020. The stock looks undervalued, considering its earnings growth going forward.

Analysts’ recommendations for Comcast stock

Overall, analysts favor a “buy” rating for Comcast stock. Among the analysts tracking the stock, 81.8% recommended a “buy” rating, while 18.2% recommended a “hold” rating. None of the analysts recommended a “sell” rating.

On average, analysts’ 12-month target price for the stock is $49.26, which implies a rise of 13.3% from its closing price of $43.46 on August 13. The stock’s median target price is $50.00.

Technical levels

On August 13, Comcast stock closed at $43.46, which was 2.4% higher than its previous closing price, 4.0% lower than its 52-week high of $45.29, and 33.3% higher than its 52-week low of $32.61. Year-to-date, Comcast stock has risen more than 27%. The company’s market cap is $193.0 billion.

Based on its closing price on August 13, Comcast stock was trading 0.1% above its 20-day moving average of $43.44, 1.0% above its 50-day moving average of $43.03, and 2.4% above its 100-day moving average of $42.46.

The company’s 14-day RSI (relative strength index) score stood at 44, which indicates investors are neutral toward the stock.

Financial performance

In the second quarter, Comcast reported consolidated revenues of $26.86 billion—a rise of 23.6% year-over-year and $198 million below the consensus estimate. The company reported a consolidated adjusted EBITDA of $8.72 billion—an increase of more than 17%. Comcast also reported adjusted EPS of $0.78—a rise of 20% and $0.03 better than the consensus estimate of $0.75.

Analysts expect Comcast’s net revenues to see YoY changes of 23.1% to $27.25 billion in the third quarter and 2.8% to $28.63 billion in the fourth quarter. Analysts also expect the company’s adjusted EPS to see YoY changes of 16.9% to $0.76 in the third quarter and 20.3% to $0.77 in the fourth quarter.

Read Comcast Shares Pop on Goldman’s Optimism to learn more about what’s driving Comcast stock.