Comcast Corporation (CMCSA) delivered lackluster second-quarter earnings that featured an earnings miss as parks and studios segments underdeliver. The stock has fallen 5% so far today on the news, adding to a concerning trend over the past few months.
Earnings were up in the quarter to $1.21 a share, which was well above the $1.12 earnings consensus from Wall Street.
However, revenue was down 2.7% in the quarter to just $29.7 billion. Analysts were expecting $30 billion. The two segments holding the company back are parks (down 11%) and studios (down 27%). Here’s how these businesses performed compared to the outlook:
- Parks: $1.98 billion vs $2.21 billion consensus.
- Studios: $2.25 billion vs $2.51 billion consensus.
The step backward can be partially attributed to a really impressive performance this time last year thanks to blockbuster movies Fast X and the Super Mario Bros. Movie.
Meanwhile, parks saw a slight uptick post-COVID, but consumers have since shifted their focus to other areas of entertainment – like traveling abroad or boarding cruises.
This decrease in demand came as Comcast was excited to roll out new attractions, including The Epic Universe theme park – which has since had its opening pushed to 2025.
Other issues include the siphoning of customers away from the Xfinity brand of internet and cable services – as more than 120,000 broadband customers moved to other telecom companies, like Verizon. It also lost 419,000 video subscribers as demand for cable continues to dwindle.
CMCSA has now fallen 13% through 2024 thus far. It doesn’t look as if things will turn around anytime soon, either. So, should investors cut losses on this stock or continue to be patient with the company? We’ve found 3 things in the VectorVest stock software to help you decide.
CMCSA Still Has Very Good Upside Potential With Fair Safety and Timing
VectorVest is a proprietary stock rating system that helps you win more trades with less work, all by delivering clear, actionable insights in just 3 ratings.
These are relative value (RV), relative safety (RS), and relative timing (RT). Each sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy.
Better yet, the system issues a clear buy, sell, or hold recommendation for any given stock at any given time. You can effectively remove human error, guesswork, and emotion from your decision-making. As for CMCSA, here’s what you need to know:
- Very Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It’s a much better indicator than the standard comparison of price to value alone. CMCSA has a very good RV rating of 1.38. The stock is undervalued with a current value of $52.75.
- Fair Safety: The RS rating is a risk indicator. It’s computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. CMCSA has a fair RS rating of 0.94.
- Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year to paint the full picture for investors. Despite poor performance in both the short and long term, the RT rating of 0.92 is still fair for CMCSA.
The overall VST rating of 1.08 is fair for CMCSA and the stock is rated a HOLD for the time being. However, we encourage you to dig a bit deeper into this situation with a free stock analysis at VectorVest. Transform your trading strategy for the better today!
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VectorVest advocates buying safe, undervalued stocks, rising in price. CMCSA is being held back by weak revenue performance in its parks and studios segments, and the disappointing performance in Q2 sent shares lower today. However, the stock still has very good upside potential with fair safety and timing.
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