Intrinsic value of Comcast Cl A - CMCSA

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$39.25

  Intrinsic Value

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  Value-price divergence*

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CMCSA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 186.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.91
  9.20
  8.78
  8.40
  8.06
  7.76
  7.48
  7.23
  7.01
  6.81
  6.63
  6.46
  6.32
  6.19
  6.07
  5.96
  5.86
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.34
  5.30
  5.27
  5.24
  5.22
  5.20
Revenue, $m
  80,403
  87,800
  95,509
  103,534
  111,880
  120,557
  129,575
  138,946
  148,684
  158,807
  169,331
  180,278
  191,668
  203,524
  215,873
  228,741
  242,156
  256,149
  270,750
  285,995
  301,917
  318,555
  335,946
  354,133
  373,158
  393,066
  413,905
  435,723
  458,573
  482,510
  507,590
Variable operating expenses, $m
 
  68,680
  74,394
  80,342
  86,529
  92,961
  99,646
  106,592
  113,810
  121,314
  129,115
  133,631
  142,074
  150,863
  160,016
  169,555
  179,499
  189,870
  200,694
  211,994
  223,796
  236,129
  249,020
  262,501
  276,604
  291,360
  306,807
  322,980
  339,918
  357,661
  376,251
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  63,578
  68,680
  74,394
  80,342
  86,529
  92,961
  99,646
  106,592
  113,810
  121,314
  129,115
  133,631
  142,074
  150,863
  160,016
  169,555
  179,499
  189,870
  200,694
  211,994
  223,796
  236,129
  249,020
  262,501
  276,604
  291,360
  306,807
  322,980
  339,918
  357,661
  376,251
Operating income, $m
  16,825
  19,120
  21,115
  23,191
  25,351
  27,596
  29,929
  32,354
  34,874
  37,493
  40,216
  46,647
  49,594
  52,662
  55,857
  59,187
  62,658
  66,278
  70,057
  74,001
  78,121
  82,426
  86,926
  91,632
  96,554
  101,706
  107,098
  112,743
  118,656
  124,849
  131,339
EBITDA, $m
  26,383
  30,819
  33,525
  36,342
  39,272
  42,317
  45,483
  48,772
  52,190
  55,743
  59,438
  63,280
  67,278
  71,440
  75,775
  80,291
  85,000
  89,912
  95,037
  100,388
  105,977
  111,817
  117,922
  124,306
  130,984
  137,972
  145,286
  152,945
  160,966
  169,368
  178,171
Interest expense (income), $m
  2,565
  2,599
  3,109
  3,641
  4,194
  4,770
  5,369
  5,991
  6,637
  7,309
  8,008
  8,734
  9,489
  10,275
  11,093
  11,944
  12,832
  13,758
  14,723
  15,730
  16,782
  17,880
  19,028
  20,228
  21,483
  22,795
  24,168
  25,606
  27,111
  28,688
  30,339
Earnings before tax, $m
  14,353
  16,522
  18,006
  19,550
  21,157
  22,826
  24,561
  26,363
  28,237
  30,184
  32,209
  37,913
  40,105
  42,387
  44,765
  47,242
  49,826
  52,521
  55,334
  58,271
  61,339
  64,546
  67,898
  71,404
  75,072
  78,911
  82,929
  87,137
  91,545
  96,162
  101,000
Tax expense, $m
  5,308
  4,461
  4,862
  5,279
  5,712
  6,163
  6,631
  7,118
  7,624
  8,150
  8,696
  10,237
  10,828
  11,445
  12,086
  12,755
  13,453
  14,181
  14,940
  15,733
  16,562
  17,427
  18,332
  19,279
  20,269
  21,306
  22,391
  23,527
  24,717
  25,964
  27,270
Net income, $m
  8,695
  12,061
  13,144
  14,272
  15,444
  16,663
  17,929
  19,245
  20,613
  22,034
  23,512
  27,677
  29,277
  30,943
  32,678
  34,487
  36,373
  38,340
  40,394
  42,538
  44,778
  47,118
  49,565
  52,125
  54,803
  57,605
  60,538
  63,610
  66,827
  70,198
  73,730

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,301
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  180,500
  193,392
  210,372
  228,048
  246,432
  265,545
  285,408
  306,048
  327,499
  349,795
  372,976
  397,087
  422,175
  448,292
  475,492
  503,835
  533,384
  564,204
  596,367
  629,944
  665,016
  701,662
  739,970
  780,029
  821,934
  865,784
  911,684
  959,742
  1,010,073
  1,062,797
  1,118,039
Adjusted assets (=assets-cash), $m
  177,199
  193,392
  210,372
  228,048
  246,432
  265,545
  285,408
  306,048
  327,499
  349,795
  372,976
  397,087
  422,175
  448,292
  475,492
  503,835
  533,384
  564,204
  596,367
  629,944
  665,016
  701,662
  739,970
  780,029
  821,934
  865,784
  911,684
  959,742
  1,010,073
  1,062,797
  1,118,039
Revenue / Adjusted assets
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
  0.454
Average production assets, $m
  117,987
  128,803
  140,112
  151,884
  164,128
  176,858
  190,087
  203,834
  218,120
  232,970
  248,409
  264,467
  281,176
  298,570
  316,686
  335,563
  355,243
  375,770
  397,191
  419,554
  442,912
  467,320
  492,833
  519,513
  547,423
  576,628
  607,198
  639,206
  672,727
  707,842
  744,634
Working capital, $m
  -5,174
  -3,249
  -3,534
  -3,831
  -4,140
  -4,461
  -4,794
  -5,141
  -5,501
  -5,876
  -6,265
  -6,670
  -7,092
  -7,530
  -7,987
  -8,463
  -8,960
  -9,478
  -10,018
  -10,582
  -11,171
  -11,787
  -12,430
  -13,103
  -13,807
  -14,543
  -15,314
  -16,122
  -16,967
  -17,853
  -18,781
Total debt, $m
  61,046
  69,090
  80,908
  93,210
  106,006
  119,308
  133,133
  147,499
  162,428
  177,946
  194,080
  210,862
  228,323
  246,500
  265,432
  285,158
  305,724
  327,175
  349,560
  372,930
  397,340
  422,846
  449,508
  477,389
  506,555
  537,075
  569,021
  602,470
  637,500
  674,196
  712,644
Total liabilities, $m
  126,557
  134,601
  146,419
  158,721
  171,517
  184,819
  198,644
  213,010
  227,939
  243,457
  259,591
  276,373
  293,834
  312,011
  330,943
  350,669
  371,235
  392,686
  415,071
  438,441
  462,851
  488,357
  515,019
  542,900
  572,066
  602,586
  634,532
  667,981
  703,011
  739,707
  778,155
Total equity, $m
  53,943
  58,791
  63,953
  69,326
  74,915
  80,726
  86,764
  93,039
  99,560
  106,338
  113,385
  120,714
  128,341
  136,281
  144,550
  153,166
  162,149
  171,518
  181,295
  191,503
  202,165
  213,305
  224,951
  237,129
  249,868
  263,198
  277,152
  291,762
  307,062
  323,090
  339,884
Total liabilities and equity, $m
  180,500
  193,392
  210,372
  228,047
  246,432
  265,545
  285,408
  306,049
  327,499
  349,795
  372,976
  397,087
  422,175
  448,292
  475,493
  503,835
  533,384
  564,204
  596,366
  629,944
  665,016
  701,662
  739,970
  780,029
  821,934
  865,784
  911,684
  959,743
  1,010,073
  1,062,797
  1,118,039
Debt-to-equity ratio
  1.132
  1.180
  1.270
  1.340
  1.420
  1.480
  1.530
  1.590
  1.630
  1.670
  1.710
  1.750
  1.780
  1.810
  1.840
  1.860
  1.890
  1.910
  1.930
  1.950
  1.970
  1.980
  2.000
  2.010
  2.030
  2.040
  2.050
  2.060
  2.080
  2.090
  2.100
Adjusted equity ratio
  0.286
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304
  0.304

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8,695
  12,061
  13,144
  14,272
  15,444
  16,663
  17,929
  19,245
  20,613
  22,034
  23,512
  27,677
  29,277
  30,943
  32,678
  34,487
  36,373
  38,340
  40,394
  42,538
  44,778
  47,118
  49,565
  52,125
  54,803
  57,605
  60,538
  63,610
  66,827
  70,198
  73,730
Depreciation, amort., depletion, $m
  9,558
  11,699
  12,410
  13,150
  13,921
  14,721
  15,553
  16,418
  17,316
  18,250
  19,221
  16,633
  17,684
  18,778
  19,917
  21,105
  22,342
  23,633
  24,981
  26,387
  27,856
  29,391
  30,996
  32,674
  34,429
  36,266
  38,189
  40,202
  42,310
  44,518
  46,832
Funds from operations, $m
  17,543
  23,760
  25,554
  27,422
  29,365
  31,384
  33,482
  35,663
  37,929
  40,284
  42,734
  44,310
  46,961
  49,721
  52,596
  55,591
  58,715
  61,974
  65,374
  68,925
  72,634
  76,509
  80,561
  84,799
  89,232
  93,871
  98,727
  103,812
  109,137
  114,716
  120,562
Change in working capital, $m
  -1,697
  -274
  -285
  -297
  -309
  -321
  -334
  -347
  -360
  -375
  -389
  -405
  -421
  -439
  -457
  -476
  -496
  -518
  -540
  -564
  -589
  -616
  -643
  -673
  -704
  -737
  -771
  -807
  -845
  -886
  -928
Cash from operations, $m
  19,240
  26,190
  25,840
  27,719
  29,674
  31,705
  33,816
  36,010
  38,289
  40,659
  43,123
  44,715
  47,382
  50,159
  53,053
  56,068
  59,211
  62,491
  65,914
  69,489
  73,223
  77,125
  81,205
  85,472
  89,936
  94,607
  99,498
  104,619
  109,983
  115,602
  121,490
Maintenance CAPEX, $m
  0
  -7,421
  -8,101
  -8,812
  -9,552
  -10,323
  -11,123
  -11,955
  -12,820
  -13,718
  -14,652
  -15,623
  -16,633
  -17,684
  -18,778
  -19,917
  -21,105
  -22,342
  -23,633
  -24,981
  -26,387
  -27,856
  -29,391
  -30,996
  -32,674
  -34,429
  -36,266
  -38,189
  -40,202
  -42,310
  -44,518
New CAPEX, $m
  -10,821
  -10,816
  -11,309
  -11,772
  -12,245
  -12,729
  -13,229
  -13,747
  -14,286
  -14,850
  -15,439
  -16,058
  -16,709
  -17,394
  -18,116
  -18,877
  -19,680
  -20,527
  -21,421
  -22,363
  -23,358
  -24,407
  -25,514
  -26,680
  -27,910
  -29,205
  -30,570
  -32,008
  -33,521
  -35,115
  -36,792
Cash from investing activities, $m
  -18,385
  -18,237
  -19,410
  -20,584
  -21,797
  -23,052
  -24,352
  -25,702
  -27,106
  -28,568
  -30,091
  -31,681
  -33,342
  -35,078
  -36,894
  -38,794
  -40,785
  -42,869
  -45,054
  -47,344
  -49,745
  -52,263
  -54,905
  -57,676
  -60,584
  -63,634
  -66,836
  -70,197
  -73,723
  -77,425
  -81,310
Free cash flow, $m
  855
  7,953
  6,430
  7,135
  7,877
  8,653
  9,464
  10,307
  11,183
  12,091
  13,032
  13,033
  14,040
  15,081
  16,158
  17,273
  18,427
  19,622
  20,860
  22,145
  23,478
  24,862
  26,300
  27,796
  29,352
  30,973
  32,662
  34,423
  36,260
  38,177
  40,179
Issuance/(repayment) of debt, $m
  7,969
  11,345
  11,818
  12,302
  12,796
  13,302
  13,825
  14,366
  14,930
  15,518
  16,134
  16,781
  17,461
  18,177
  18,932
  19,727
  20,566
  21,451
  22,385
  23,370
  24,410
  25,506
  26,662
  27,881
  29,166
  30,520
  31,946
  33,449
  35,030
  36,696
  38,449
Issuance/(repurchase) of shares, $m
  -4,977
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  2,752
  11,345
  11,818
  12,302
  12,796
  13,302
  13,825
  14,366
  14,930
  15,518
  16,134
  16,781
  17,461
  18,177
  18,932
  19,727
  20,566
  21,451
  22,385
  23,370
  24,410
  25,506
  26,662
  27,881
  29,166
  30,520
  31,946
  33,449
  35,030
  36,696
  38,449
Total cash flow (excl. dividends), $m
  3,607
  19,298
  18,248
  19,437
  20,672
  21,956
  23,288
  24,673
  26,113
  27,609
  29,166
  29,814
  31,501
  33,258
  35,090
  37,000
  38,993
  41,073
  43,245
  45,515
  47,887
  50,368
  52,962
  55,677
  58,518
  61,493
  64,608
  67,871
  71,290
  74,873
  78,628
Retained Cash Flow (-), $m
  -1,674
  -4,848
  -5,162
  -5,373
  -5,589
  -5,810
  -6,038
  -6,275
  -6,521
  -6,778
  -7,047
  -7,330
  -7,627
  -7,939
  -8,269
  -8,616
  -8,983
  -9,369
  -9,777
  -10,208
  -10,662
  -11,141
  -11,646
  -12,178
  -12,739
  -13,331
  -13,954
  -14,610
  -15,301
  -16,028
  -16,794
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  14,450
  13,086
  14,064
  15,083
  16,145
  17,250
  18,399
  19,592
  20,831
  22,119
  22,485
  23,874
  25,319
  26,821
  28,384
  30,010
  31,704
  33,468
  35,307
  37,226
  39,227
  41,317
  43,499
  45,779
  48,162
  50,655
  53,262
  55,990
  58,845
  61,834
Discount rate, %
 
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
 
  13,530
  11,400
  11,322
  11,140
  10,854
  10,469
  9,992
  9,432
  8,801
  8,114
  7,080
  6,376
  5,662
  4,954
  4,268
  3,618
  3,015
  2,468
  1,983
  1,561
  1,204
  909
  670
  483
  339
  232
  154
  99
  62
  38
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Comcast Corporation operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, and Theme Parks segments. The Cable Communications segment offers video, high-speed Internet, and voice services to residential and business customers under the XFINITY brand. This segment also provides business services, such as Ethernet network services; and cellular backhaul services to mobile network operators. The Cable Networks segment operates national cable networks, which provide entertainment, news and information, and sports content; regional sports and news networks; international cable networks; and cable television studio production operations, as well as owns various digital media properties, which primarily include brand-aligned Websites. The Broadcast Television segment operates NBC and Telemundo broadcast networks, NBC and Telemundo local broadcast television stations, broadcast television studio production operations, and related digital media properties. The Filmed Entertainment segment produces, acquires, markets, and distributes filmed entertainment under the Universal Pictures, Illumination, Focus Features, and DreamWorks Animation names. This segment also develops, produces, and licenses stage plays. The Theme Parks segment operates Universal theme parks in Orlando, Florida, as well as in Hollywood, California; and Universal studios theme park in Osaka, Japan. The company also owns the Philadelphia Flyers, as well as the Wells Fargo Center arena in Philadelphia, Pennsylvania; and operates arena management-related businesses. Comcast Corporation was founded in 1963 and is headquartered in Philadelphia, Pennsylvania.

FINANCIAL RATIOS  of  Comcast Cl A (CMCSA)

Valuation Ratios
P/E Ratio 21.4
Price to Sales 2.3
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 9.7
Price to Free Cash Flow 22.1
Growth Rates
Sales Growth Rate 7.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.6%
Cap. Spend. - 3 Yr. Gr. Rate 7.3%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 103%
Total Debt to Equity 113.2%
Interest Coverage 7
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital 7.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity 16.4%
Return On Equity - 3 Yr. Avg. 16%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 69.6%
Gross Margin - 3 Yr. Avg. 69.6%
EBITDA Margin 32.9%
EBITDA Margin - 3 Yr. Avg. 33%
Operating Margin 20.9%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 17.9%
Pre-Tax Margin - 3 Yr. Avg. 18%
Net Profit Margin 10.8%
Net Profit Margin - 3 Yr. Avg. 11.3%
Effective Tax Rate 37%
Eff/ Tax Rate - 3 Yr. Avg. 35%
Payout Ratio 29.9%

CMCSA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CMCSA stock intrinsic value calculation we used $80403 million for the last fiscal year's total revenue generated by Comcast Cl A. The default revenue input number comes from 2016 income statement of Comcast Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CMCSA stock valuation model: a) initial revenue growth rate of 9.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.8%, whose default value for CMCSA is calculated based on our internal credit rating of Comcast Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Comcast Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CMCSA stock the variable cost ratio is equal to 78.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CMCSA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.5% for Comcast Cl A.

Corporate tax rate of 27% is the nominal tax rate for Comcast Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CMCSA stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CMCSA are equal to 146.7%.

Life of production assets of 15.9 years is the average useful life of capital assets used in Comcast Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CMCSA is equal to -3.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $53943 million for Comcast Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 4737.7 million for Comcast Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Comcast Cl A at the current share price and the inputted number of shares is $186.0 billion.


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COMPANY NEWS

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▶ [$$] Sprint: Not pocket change   [01:23PM  Financial Times]
▶ Sprint's Desperate Ways   [12:40PM  Bloomberg]
▶ Is a Sprint-Charter-Comcast deal in the works?   [11:40AM  American City Business Journals]
▶ Top 4 Companies Owned by Comcast (CMCSA)   [09:05AM  Investopedia]
▶ This Week in Comcast: Talks with Sprint for possible wireless deal   [08:53AM  American City Business Journals]
▶ WSJ: Sprint enters talks with Charter, Comcast   [09:35PM  American City Business Journals]
▶ Could T-Mobile Be Left in the Cold?   [10:36AM  Market Realist]
▶ Big Cable broke its promise and you're paying for it   [Jun-23-17 03:11PM  Yahoo Finance]
▶ Outdoor hotspots coming to 2 Alabama cities   [02:16PM  American City Business Journals]
▶ A Technical Analysis of Comcast   [10:35AM  Market Realist]
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▶ Inside Comcasts Valuation Metrics   [Jun-22-17 05:35PM  Market Realist]
▶ Whats Comcasts Understanding of Internet TV?   [04:05PM  Market Realist]
▶ Altice IPO Raises $1.9 Billion; Staples Up On Buyout Buzz   [Jun-21-17 11:05PM  Investor's Business Daily]
▶ Is Comcast's Rally Running Out of Steam?   [01:47PM  Barrons.com]
▶ Snap Signs $100M Deal With Time Warner for Content   [Jun-19-17 03:31PM  Investopedia]
Stock chart of CMCSA Financial statements of CMCSA Annual reports of CMCSA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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