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CMCS.A – Market expectations are for Uniform ROA compression, and management may be concerned about customer additions, Peacock, and their parks segment

March 11, 2021

  • Comcast Corporation (CMCS.A:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 19.7x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management may be concerned about sustaining new customer additions, the progress of their Peacock launch, and the pace of recovery for their parks segment
  • Specifically, management may lack confidence in their ability to improve the performance of their mobile business, maintain record-high broadband additions for their cable segment, and sustain record new customer relationship additions. Furthermore, management may be exaggerating the utilization of their self-installation offerings, the capabilities of their self-help tool, Xfinity Assistant, and the potential of their newly enhanced MVNO agreement with Verizon. They may also lack confidence in their ability to strategically invest in their wireless business, maintain higher video rates, and sustain the sign-up momentum for Peacock. Additionally, they may have concerns about the pace of the recovery and return to profitability of their reopened theme parks in Orlando and Osaka, additional postponements of the Olympics, and their business mix