Comcast
What Fools say:
Here's how Comcast's CAPS score rates against some of its peers and competitors:
Market Cap (millions) |
Trailing P/E Ratio |
CAPS Rating |
|
---|---|---|---|
Verizon Communications |
$104,780 |
19.2 |
|
Comcast |
$52,428 |
22.3 |
|
DirecTV Group |
$26,783 |
19.6 |
|
Time Warner Cable |
$23,546 |
21.0 |
|
Cablevision Systems |
$7,374 |
256.0 |
Comcast has stepped down to a two-star rating after a long stay in Three-Star City. The new bears point to increased competition and bad management, while a few recent bulls are touting new services and a stock price with lots of pessimism already built in.
Net income was inflated in the September 2006 quarter by $694 million in one-time gains from the Adelphia shuffle, and once again in the March 2007 quarter by $500 million in some other one-time gains (both gains before taxes). Aside from those temporary boosts, and a rapidly rising revenue stream, it's "steady as she goes, cap'n!"
6/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
|
---|---|---|---|---|---|---|
Gross |
63.8% |
63.9% |
63.9% |
63.8% |
63.9% |
63.9% |
Operating |
17.5% |
18.3% |
18.5% |
18.2% |
18.1% |
18.0% |
Net |
5.8% |
9.7% |
10.1% |
10.9% |
10.6% |
7.9% |
FCF/Revenue |
8.4% |
9.4% |
8.9% |
7.0% |
7.8% |
5.3% |
Y-O-Y Growth |
6/2006 |
9/2006 |
12/2006 |
3/2007 |
6/2007 |
9/2007 |
---|---|---|---|---|---|---|
Revenue |
7.2% |
11.8% |
18.5% |
25.6% |
28.6% |
28.1% |
Earnings |
(2.1%) |
67.2% |
169.9% |
134.6% |
147.2% |
26.2% |
One Fool says:
Triple-play service bundles are working out great for Comcast, and the digital set-top boxes that play a part in that gambit also expose customers to tempting extras like video on demand and DVRs.
There's even a license agreement and actual plans in place to roll out software upgrades to DVR users, who will then wake up the next morning with bona fide TiVo
In the bigger picture, I'm wondering what will happen when Comcast's triple-play strategy reaches saturation, and then bumps into growing competition from Verizon's FiOS and other telecom solutions. America isn't used to having multiple choices for land-line TV services in the same service area. When that happens -- and I think that'll be within the next two years, tops -- both the upstart telcos and the incumbent cable systems will need to compete on pricing and innovative services, which will hurt their bottom lines but do wonders for consumers.
It'll be fun to watch that -- from the sidelines. But right now, Comcast's stock has been pummeled by recession fears and competition scares, and I think it's due for a bounce after decent earnings numbers. Just keep an eye on subscriber growth, because that's where the meat is.
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