Intrinsic value of Comcast Cl A - CMCSA

Previous Close

$41.24

  Intrinsic Value

$31.05

stock screener

  Rating & Target

sell

-25%

  Value-price divergence*

-41%

Previous close

$41.24

 
Intrinsic value

$31.05

 
Up/down potential

-25%

 
Rating

sell

 
Value-price divergence*

-41%

*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 195.4

 

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
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.87
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.59
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
Revenue, $m
  80,403
  87,559
  95,010
  102,762
  110,822
  119,199
  127,903
  136,950
  146,352
  156,126
  166,292
  176,867
  187,875
  199,339
  211,282
  223,731
  236,714
  250,260
  264,401
  279,169
  294,598
  310,725
  327,587
  345,224
  363,679
  382,994
  403,216
  424,393
  446,575
  469,815
  494,169
Variable operating expenses, $m
 
  68,501
  74,024
  79,770
  85,745
  91,954
  98,407
  105,112
  112,081
  119,327
  126,862
  131,103
  139,263
  147,760
  156,613
  165,840
  175,464
  185,505
  195,987
  206,934
  218,371
  230,325
  242,824
  255,898
  269,577
  283,894
  298,884
  314,581
  331,024
  348,251
  366,303
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
  68,501
  74,024
  79,770
  85,745
  91,954
  98,407
  105,112
  112,081
  119,327
  126,862
  131,103
  139,263
  147,760
  156,613
  165,840
  175,464
  185,505
  195,987
  206,934
  218,371
  230,325
  242,824
  255,898
  269,577
  283,894
  298,884
  314,581
  331,024
  348,251
  366,303
Operating income, $m
  16,825
  19,058
  20,986
  22,992
  25,077
  27,245
  29,497
  31,838
  34,270
  36,800
  39,430
  45,764
  48,613
  51,579
  54,669
  57,890
  61,250
  64,755
  68,414
  72,235
  76,227
  80,400
  84,763
  89,327
  94,102
  99,100
  104,332
  109,811
  115,551
  121,564
  127,866
EBITDA, $m
  26,383
  30,734
  33,350
  36,071
  38,900
  41,840
  44,896
  48,071
  51,371
  54,802
  58,371
  62,083
  65,947
  69,971
  74,163
  78,533
  83,090
  87,845
  92,808
  97,992
  103,408
  109,069
  114,987
  121,178
  127,656
  134,436
  141,534
  148,968
  156,754
  164,912
  173,460
Interest expense (income), $m
  2,565
  2,599
  3,092
  3,606
  4,141
  4,697
  5,275
  5,876
  6,500
  7,148
  7,823
  8,524
  9,254
  10,013
  10,804
  11,628
  12,486
  13,382
  14,317
  15,292
  16,311
  17,375
  18,488
  19,651
  20,868
  22,141
  23,474
  24,869
  26,329
  27,860
  29,463
Earnings before tax, $m
  14,353
  16,459
  17,893
  19,385
  20,936
  22,547
  24,222
  25,962
  27,771
  29,651
  31,607
  37,240
  39,359
  41,566
  43,865
  46,263
  48,763
  51,373
  54,097
  56,943
  59,916
  63,024
  66,275
  69,675
  73,234
  76,958
  80,858
  84,943
  89,222
  93,705
  98,403
Tax expense, $m
  5,308
  4,444
  4,831
  5,234
  5,653
  6,088
  6,540
  7,010
  7,498
  8,006
  8,534
  10,055
  10,627
  11,223
  11,844
  12,491
  13,166
  13,871
  14,606
  15,374
  16,177
  17,017
  17,894
  18,812
  19,773
  20,779
  21,832
  22,935
  24,090
  25,300
  26,569
Net income, $m
  8,695
  12,015
  13,062
  14,151
  15,283
  16,460
  17,682
  18,952
  20,273
  21,645
  23,073
  27,186
  28,732
  30,343
  32,022
  33,772
  35,597
  37,502
  39,491
  41,568
  43,739
  46,008
  48,381
  50,863
  53,461
  56,180
  59,027
  62,008
  65,132
  68,404
  71,834

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
  192,861
  209,273
  226,348
  244,101
  262,552
  281,726
  301,651
  322,361
  343,890
  366,281
  389,576
  413,822
  439,072
  465,378
  492,799
  521,396
  551,234
  582,381
  614,909
  648,894
  684,415
  721,557
  760,406
  801,054
  843,599
  888,141
  934,786
  983,645
  1,034,835
  1,088,478
Adjusted assets (=assets-cash), $m
  177,199
  192,861
  209,273
  226,348
  244,101
  262,552
  281,726
  301,651
  322,361
  343,890
  366,281
  389,576
  413,822
  439,072
  465,378
  492,799
  521,396
  551,234
  582,381
  614,909
  648,894
  684,415
  721,557
  760,406
  801,054
  843,599
  888,141
  934,786
  983,645
  1,034,835
  1,088,478
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
  128,449
  139,380
  150,752
  162,575
  174,864
  187,634
  200,905
  214,698
  229,037
  243,950
  259,465
  275,613
  292,430
  309,950
  328,213
  347,259
  367,132
  387,876
  409,540
  432,175
  455,833
  480,570
  506,444
  533,517
  561,852
  591,518
  622,584
  655,125
  689,219
  724,946
Working capital, $m
  -5,174
  -3,240
  -3,515
  -3,802
  -4,100
  -4,410
  -4,732
  -5,067
  -5,415
  -5,777
  -6,153
  -6,544
  -6,951
  -7,376
  -7,817
  -8,278
  -8,758
  -9,260
  -9,783
  -10,329
  -10,900
  -11,497
  -12,121
  -12,773
  -13,456
  -14,171
  -14,919
  -15,703
  -16,523
  -17,383
  -18,284
Total debt, $m
  61,046
  68,720
  80,143
  92,027
  104,383
  117,225
  130,570
  144,438
  158,852
  173,837
  189,421
  205,634
  222,509
  240,083
  258,392
  277,477
  297,381
  318,148
  339,826
  362,466
  386,119
  410,842
  436,692
  463,731
  492,023
  521,634
  552,635
  585,100
  619,106
  654,734
  692,070
Total liabilities, $m
  126,557
  134,231
  145,654
  157,538
  169,894
  182,736
  196,081
  209,949
  224,363
  239,348
  254,932
  271,145
  288,020
  305,594
  323,903
  342,988
  362,892
  383,659
  405,337
  427,977
  451,630
  476,353
  502,203
  529,242
  557,534
  587,145
  618,146
  650,611
  684,617
  720,245
  757,581
Total equity, $m
  53,943
  58,630
  63,619
  68,810
  74,207
  79,816
  85,645
  91,702
  97,998
  104,543
  111,349
  118,431
  125,802
  133,478
  141,475
  149,811
  158,504
  167,575
  177,044
  186,932
  197,264
  208,062
  219,353
  231,163
  243,521
  256,454
  269,995
  284,175
  299,028
  314,590
  330,897
Total liabilities and equity, $m
  180,500
  192,861
  209,273
  226,348
  244,101
  262,552
  281,726
  301,651
  322,361
  343,891
  366,281
  389,576
  413,822
  439,072
  465,378
  492,799
  521,396
  551,234
  582,381
  614,909
  648,894
  684,415
  721,556
  760,405
  801,055
  843,599
  888,141
  934,786
  983,645
  1,034,835
  1,088,478
Debt-to-equity ratio
  1.132
  1.170
  1.260
  1.340
  1.410
  1.470
  1.520
  1.580
  1.620
  1.660
  1.700
  1.740
  1.770
  1.800
  1.830
  1.850
  1.880
  1.900
  1.920
  1.940
  1.960
  1.970
  1.990
  2.010
  2.020
  2.030
  2.050
  2.060
  2.070
  2.080
  2.090
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
  12,015
  13,062
  14,151
  15,283
  16,460
  17,682
  18,952
  20,273
  21,645
  23,073
  27,186
  28,732
  30,343
  32,022
  33,772
  35,597
  37,502
  39,491
  41,568
  43,739
  46,008
  48,381
  50,863
  53,461
  56,180
  59,027
  62,008
  65,132
  68,404
  71,834
Depreciation, amort., depletion, $m
  9,558
  11,677
  12,364
  13,079
  13,823
  14,596
  15,399
  16,234
  17,101
  18,003
  18,941
  16,319
  17,334
  18,392
  19,494
  20,642
  21,840
  23,090
  24,395
  25,757
  27,181
  28,669
  30,225
  31,852
  33,555
  35,337
  37,202
  39,156
  41,203
  43,347
  45,594
Funds from operations, $m
  17,543
  23,692
  25,426
  27,230
  29,106
  31,055
  33,081
  35,186
  37,374
  39,648
  42,014
  43,504
  46,066
  48,735
  51,515
  54,414
  57,437
  60,592
  63,886
  67,325
  70,920
  74,677
  78,605
  82,715
  87,015
  91,516
  96,229
  101,165
  106,335
  111,752
  117,428
Change in working capital, $m
  -1,697
  -265
  -276
  -287
  -298
  -310
  -322
  -335
  -348
  -362
  -376
  -391
  -407
  -424
  -442
  -461
  -480
  -501
  -523
  -546
  -571
  -597
  -624
  -653
  -683
  -715
  -748
  -784
  -821
  -860
  -901
Cash from operations, $m
  19,240
  23,957
  25,702
  27,517
  29,404
  31,365
  33,403
  35,521
  37,722
  40,010
  42,390
  43,895
  46,474
  49,159
  51,957
  54,875
  57,918
  61,093
  64,409
  67,872
  71,490
  75,273
  79,229
  83,367
  87,698
  92,231
  96,977
  101,948
  107,155
  112,611
  118,329
Maintenance CAPEX, $m
  0
  -7,421
  -8,079
  -8,766
  -9,481
  -10,225
  -10,998
  -11,801
  -12,636
  -13,503
  -14,405
  -15,343
  -16,319
  -17,334
  -18,392
  -19,494
  -20,642
  -21,840
  -23,090
  -24,395
  -25,757
  -27,181
  -28,669
  -30,225
  -31,852
  -33,555
  -35,337
  -37,202
  -39,156
  -41,203
  -43,347
New CAPEX, $m
  -10,821
  -10,462
  -10,931
  -11,372
  -11,824
  -12,289
  -12,770
  -13,271
  -13,793
  -14,339
  -14,912
  -15,515
  -16,149
  -16,816
  -17,520
  -18,263
  -19,046
  -19,873
  -20,744
  -21,664
  -22,635
  -23,658
  -24,737
  -25,874
  -27,073
  -28,336
  -29,666
  -31,066
  -32,541
  -34,093
  -35,727
Cash from investing activities, $m
  -18,385
  -17,883
  -19,010
  -20,138
  -21,305
  -22,514
  -23,768
  -25,072
  -26,429
  -27,842
  -29,317
  -30,858
  -32,468
  -34,150
  -35,912
  -37,757
  -39,688
  -41,713
  -43,834
  -46,059
  -48,392
  -50,839
  -53,406
  -56,099
  -58,925
  -61,891
  -65,003
  -68,268
  -71,697
  -75,296
  -79,074
Free cash flow, $m
  855
  6,074
  6,692
  7,379
  8,099
  8,852
  9,635
  10,449
  11,293
  12,168
  13,073
  13,038
  14,006
  15,008
  16,045
  17,118
  18,229
  19,381
  20,574
  21,813
  23,099
  24,435
  25,824
  27,269
  28,773
  30,341
  31,975
  33,679
  35,458
  37,315
  39,255
Issuance/(repayment) of debt, $m
  7,969
  10,975
  11,423
  11,884
  12,356
  12,842
  13,345
  13,868
  14,414
  14,985
  15,584
  16,213
  16,876
  17,573
  18,309
  19,085
  19,904
  20,767
  21,678
  22,640
  23,654
  24,723
  25,850
  27,039
  28,291
  29,611
  31,001
  32,465
  34,006
  35,628
  37,335
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
  10,975
  11,423
  11,884
  12,356
  12,842
  13,345
  13,868
  14,414
  14,985
  15,584
  16,213
  16,876
  17,573
  18,309
  19,085
  19,904
  20,767
  21,678
  22,640
  23,654
  24,723
  25,850
  27,039
  28,291
  29,611
  31,001
  32,465
  34,006
  35,628
  37,335
Total cash flow (excl. dividends), $m
  3,607
  17,049
  18,115
  19,263
  20,455
  21,694
  22,980
  24,317
  25,707
  27,152
  28,657
  29,251
  30,882
  32,582
  34,354
  36,203
  38,133
  40,148
  42,253
  44,452
  46,752
  49,157
  51,674
  54,308
  57,065
  59,952
  62,976
  66,144
  69,464
  72,943
  76,591
Retained Cash Flow (-), $m
  -1,674
  -4,687
  -4,989
  -5,191
  -5,397
  -5,609
  -5,829
  -6,057
  -6,296
  -6,545
  -6,807
  -7,082
  -7,371
  -7,676
  -7,997
  -8,336
  -8,693
  -9,071
  -9,469
  -9,889
  -10,331
  -10,799
  -11,291
  -11,810
  -12,357
  -12,934
  -13,541
  -14,180
  -14,853
  -15,562
  -16,307
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
 
  12,362
  13,126
  14,072
  15,058
  16,084
  17,151
  18,260
  19,411
  20,607
  21,850
  22,169
  23,511
  24,906
  26,357
  27,867
  29,439
  31,077
  32,784
  34,564
  36,421
  38,359
  40,383
  42,498
  44,708
  47,018
  49,435
  51,964
  54,611
  57,382
  60,283
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
 
  11,575
  11,435
  11,329
  11,121
  10,813
  10,409
  9,917
  9,345
  8,706
  8,015
  6,981
  6,279
  5,569
  4,868
  4,190
  3,549
  2,955
  2,418
  1,941
  1,528
  1,178
  888
  655
  471
  331
  226
  150
  97
  61
  37
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 22.5
Price to Sales 2.4
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 10.2
Price to Free Cash Flow 23.2
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 8.9% 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 $195.4 billion.

RELATED COMPANIES Price Int.Val. Rating
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TWX Time Warner 101.92 163.69  str.buy
QVCA Liberty Intera 21.80 8.47  str.sell
T AT&T 38.23 38.66  hold
WWE World Wrestlin 21.55 25.60  buy
VIAB Viacom Cl B 29.82 153.37  str.buy

COMPANY NEWS

▶ 'Weekend Update,' Diana special modest winners for networks   [Aug-15-17 05:16PM  Associated Press]
▶ Florida sets all-time tourism record in first half of 2017   [11:50AM  American City Business Journals]
▶ Comcast launches gigabit service in its hometown   [Aug-14-17 05:00PM  American City Business Journals]
▶ AT&T may be plotting to revolutionize TV advertising   [Aug-11-17 02:10PM  Business Insider]
▶ Disney-Netflix Divorce Signals Death of Cable   [Aug-10-17 02:23PM  Investopedia]
▶ The Sinner signals USA Networks move to the dark side   [Aug-09-17 09:06PM  MarketWatch]
▶ A Strong Case for Selling WWE   [06:32PM  Motley Fool]
▶ NBCs Seeso no longer a laughing matter   [05:40PM  American City Business Journals]
▶ NBC Shuts Down Web Comedy Service   [03:29PM  Bloomberg]
▶ Walt Disney Co (DIS) Lays a Q3 Egg, Gives Netflix the Boot   [Aug-08-17 04:47PM  InvestorPlace]
▶ This Week in Comcast: Lets talk about those hidden fees   [08:00AM  American City Business Journals]
▶ FX fans can watch ad-free (if theyre Xfinity subscribers)   [Aug-07-17 06:05PM  American City Business Journals]
▶ [$$] FX Offers Ad-Free Viewing for Comcast Cable Customers   [09:18AM  The Wall Street Journal]
▶ [$$] Why Comcast Tops Charter Communications   [Aug-04-17 07:38AM  Barrons.com]
▶ How Comcasts Technical Indicators Compare   [07:35AM  Market Realist]
▶ Why AMC Networks Inc's Shares Jumped 20% in July   [Aug-03-17 06:02PM  Motley Fool]
▶ Universal Orlando Resort files more permits for new Harry Potter ride   [12:10PM  American City Business Journals]
▶ Behind Viacoms Key Operational Metrics   [07:37AM  Market Realist]
▶ Why Comcast Is Upbeat about Its Advertising Business   [Aug-02-17 10:37AM  Market Realist]
▶ What Are Comcasts Key Financial Metrics?   [09:07AM  Market Realist]
▶ [$$] Sprint Says a Merger Decision Is Near   [12:09AM  The Wall Street Journal]
▶ Reality (and 'Game of Thrones') reigned in ratings last week   [Aug-01-17 04:56PM  Associated Press]
▶ Universal Orlando permits may be for Harry Potter ride replacement   [01:35PM  American City Business Journals]
▶ [$$] Sprint Says a Merger Decision Is Near   [01:05PM  The Wall Street Journal]
▶ This Week in Comcast: Why no one wants Sprint   [07:35AM  American City Business Journals]
▶ What Drove Comcasts Fiscal 2Q17 Results   [Jul-31-17 05:03PM  Market Realist]
▶ Is Softbank Eyeing Charter Bid, Shotgun Marriage For Sprint?   [04:05PM  Investor's Business Daily]
▶ Comcast tops Street 2Q forecasts   [01:32AM  Associated Press]
Stock chart of CMCSA Financial statements 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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