Intrinsic value of Comcast Cl A - CMCSA

Previous Close

$39.71

  Intrinsic Value

$31.96

stock screener

  Rating & Target

hold

-20%

Previous close

$39.71

 
Intrinsic value

$31.96

 
Up/down potential

-20%

 
Rating

hold

*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 187.2

 

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
  9.80
  9.32
  8.89
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
Revenue, $m
  80,403
  88,282
  96,510
  105,088
  114,020
  123,312
  132,972
  143,013
  153,447
  164,290
  175,560
  187,276
  199,461
  212,138
  225,333
  239,074
  253,390
  268,313
  283,877
  300,116
  317,068
  334,772
  353,268
  372,602
  392,817
  413,962
  436,086
  459,243
  483,487
  508,876
  535,470
Variable operating expenses, $m
 
  69,037
  75,136
  81,495
  88,115
  95,003
  102,164
  109,606
  117,341
  125,378
  133,732
  138,818
  147,850
  157,247
  167,028
  177,214
  187,826
  198,887
  210,424
  222,461
  235,027
  248,150
  261,860
  276,191
  291,176
  306,849
  323,249
  340,414
  358,385
  377,205
  396,918
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
  69,037
  75,136
  81,495
  88,115
  95,003
  102,164
  109,606
  117,341
  125,378
  133,732
  138,818
  147,850
  157,247
  167,028
  177,214
  187,826
  198,887
  210,424
  222,461
  235,027
  248,150
  261,860
  276,191
  291,176
  306,849
  323,249
  340,414
  358,385
  377,205
  396,918
Operating income, $m
  16,825
  19,245
  21,374
  23,594
  25,905
  28,309
  30,809
  33,407
  36,106
  38,912
  41,828
  48,458
  51,610
  54,891
  58,305
  61,860
  65,565
  69,426
  73,453
  77,655
  82,041
  86,622
  91,408
  96,411
  101,641
  107,112
  112,837
  118,829
  125,102
  131,671
  138,553
EBITDA, $m
  26,383
  30,988
  33,876
  36,887
  40,023
  43,284
  46,675
  50,200
  53,862
  57,668
  61,624
  65,736
  70,013
  74,463
  79,095
  83,918
  88,943
  94,182
  99,645
  105,345
  111,295
  117,509
  124,002
  130,788
  137,884
  145,306
  153,072
  161,201
  169,711
  178,622
  187,957
Interest expense (income), $m
  2,565
  2,599
  3,142
  3,710
  4,302
  4,918
  5,559
  6,225
  6,918
  7,638
  8,386
  9,163
  9,972
  10,812
  11,687
  12,597
  13,545
  14,533
  15,562
  16,636
  17,756
  18,925
  20,147
  21,423
  22,757
  24,151
  25,610
  27,136
  28,734
  30,406
  32,158
Earnings before tax, $m
  14,353
  16,647
  18,232
  19,884
  21,603
  23,391
  25,250
  27,181
  29,188
  31,274
  33,442
  39,294
  41,639
  44,078
  46,618
  49,263
  52,020
  54,893
  57,891
  61,019
  64,285
  67,696
  71,261
  74,988
  78,885
  82,961
  87,227
  91,693
  96,368
  101,265
  106,395
Tax expense, $m
  5,308
  4,495
  4,923
  5,369
  5,833
  6,316
  6,817
  7,339
  7,881
  8,444
  9,029
  10,609
  11,242
  11,901
  12,587
  13,301
  14,045
  14,821
  15,631
  16,475
  17,357
  18,278
  19,241
  20,247
  21,299
  22,400
  23,551
  24,757
  26,019
  27,342
  28,727
Net income, $m
  8,695
  12,152
  13,309
  14,515
  15,770
  17,075
  18,432
  19,842
  21,307
  22,830
  24,413
  28,685
  30,396
  32,177
  34,031
  35,962
  37,974
  40,072
  42,260
  44,544
  46,928
  49,418
  52,021
  54,741
  57,586
  60,562
  63,676
  66,936
  70,349
  73,924
  77,668

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
  194,455
  212,578
  231,472
  251,145
  271,612
  292,891
  315,007
  337,989
  361,872
  386,695
  412,502
  439,341
  467,264
  496,328
  526,594
  558,128
  590,999
  625,280
  661,049
  698,387
  737,382
  778,124
  820,709
  865,235
  911,810
  960,542
  1,011,549
  1,064,949
  1,120,872
  1,179,450
Adjusted assets (=assets-cash), $m
  177,199
  194,455
  212,578
  231,472
  251,145
  271,612
  292,891
  315,007
  337,989
  361,872
  386,695
  412,502
  439,341
  467,264
  496,328
  526,594
  558,128
  590,999
  625,280
  661,049
  698,387
  737,382
  778,124
  820,709
  865,235
  911,810
  960,542
  1,011,549
  1,064,949
  1,120,872
  1,179,450
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
  129,510
  141,581
  154,164
  167,267
  180,898
  195,071
  209,800
  225,107
  241,013
  257,546
  274,734
  292,609
  311,206
  330,563
  350,721
  371,723
  393,616
  416,448
  440,270
  465,139
  491,110
  518,245
  546,607
  576,262
  607,282
  639,739
  673,710
  709,275
  746,521
  785,535
Working capital, $m
  -5,174
  -3,266
  -3,571
  -3,888
  -4,219
  -4,563
  -4,920
  -5,291
  -5,678
  -6,079
  -6,496
  -6,929
  -7,380
  -7,849
  -8,337
  -8,846
  -9,375
  -9,928
  -10,503
  -11,104
  -11,732
  -12,387
  -13,071
  -13,786
  -14,534
  -15,317
  -16,135
  -16,992
  -17,889
  -18,828
  -19,812
Total debt, $m
  61,046
  69,830
  82,443
  95,593
  109,286
  123,531
  138,341
  153,734
  169,729
  186,352
  203,629
  221,590
  240,270
  259,704
  279,933
  300,999
  322,946
  345,824
  369,684
  394,579
  420,567
  447,707
  476,063
  505,702
  536,693
  569,109
  603,027
  638,527
  675,694
  714,616
  755,386
Total liabilities, $m
  126,557
  135,341
  147,954
  161,104
  174,797
  189,042
  203,852
  219,245
  235,240
  251,863
  269,140
  287,101
  305,781
  325,215
  345,444
  366,510
  388,457
  411,335
  435,195
  460,090
  486,078
  513,218
  541,574
  571,213
  602,204
  634,620
  668,538
  704,038
  741,205
  780,127
  820,897
Total equity, $m
  53,943
  59,114
  64,624
  70,367
  76,348
  82,570
  89,039
  95,762
  102,749
  110,009
  117,555
  125,401
  133,560
  142,048
  150,884
  160,085
  169,671
  179,664
  190,085
  200,959
  212,310
  224,164
  236,550
  249,495
  263,032
  277,190
  292,005
  307,511
  323,745
  340,745
  358,553
Total liabilities and equity, $m
  180,500
  194,455
  212,578
  231,471
  251,145
  271,612
  292,891
  315,007
  337,989
  361,872
  386,695
  412,502
  439,341
  467,263
  496,328
  526,595
  558,128
  590,999
  625,280
  661,049
  698,388
  737,382
  778,124
  820,708
  865,236
  911,810
  960,543
  1,011,549
  1,064,950
  1,120,872
  1,179,450
Debt-to-equity ratio
  1.132
  1.180
  1.280
  1.360
  1.430
  1.500
  1.550
  1.610
  1.650
  1.690
  1.730
  1.770
  1.800
  1.830
  1.860
  1.880
  1.900
  1.920
  1.940
  1.960
  1.980
  2.000
  2.010
  2.030
  2.040
  2.050
  2.070
  2.080
  2.090
  2.100
  2.110
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
  12,152
  13,309
  14,515
  15,770
  17,075
  18,432
  19,842
  21,307
  22,830
  24,413
  28,685
  30,396
  32,177
  34,031
  35,962
  37,974
  40,072
  42,260
  44,544
  46,928
  49,418
  52,021
  54,741
  57,586
  60,562
  63,676
  66,936
  70,349
  73,924
  77,668
Depreciation, amort., depletion, $m
  9,558
  11,743
  12,502
  13,294
  14,118
  14,975
  15,867
  16,793
  17,756
  18,756
  19,796
  17,279
  18,403
  19,573
  20,790
  22,058
  23,379
  24,756
  26,192
  27,690
  29,254
  30,887
  32,594
  34,378
  36,243
  38,194
  40,235
  42,372
  44,609
  46,951
  49,405
Funds from operations, $m
  17,543
  23,895
  25,812
  27,809
  29,888
  32,051
  34,299
  36,635
  39,063
  41,586
  44,209
  45,964
  48,799
  51,750
  54,821
  58,020
  61,353
  64,828
  68,452
  72,234
  76,182
  80,306
  84,615
  89,119
  93,829
  98,756
  103,911
  109,307
  114,957
  120,875
  127,073
Change in working capital, $m
  -1,697
  -292
  -304
  -317
  -330
  -344
  -357
  -372
  -386
  -401
  -417
  -434
  -451
  -469
  -488
  -508
  -530
  -552
  -576
  -601
  -627
  -655
  -684
  -715
  -748
  -782
  -819
  -857
  -897
  -939
  -984
Cash from operations, $m
  19,240
  24,187
  26,116
  28,126
  30,219
  32,394
  34,656
  37,007
  39,449
  41,987
  44,626
  46,397
  49,250
  52,219
  55,310
  58,529
  61,883
  65,380
  69,028
  72,835
  76,809
  80,961
  85,299
  89,834
  94,577
  99,538
  104,730
  110,164
  115,854
  121,814
  128,057
Maintenance CAPEX, $m
  0
  -7,421
  -8,145
  -8,904
  -9,696
  -10,520
  -11,377
  -12,269
  -13,195
  -14,158
  -15,158
  -16,198
  -17,279
  -18,403
  -19,573
  -20,790
  -22,058
  -23,379
  -24,756
  -26,192
  -27,690
  -29,254
  -30,887
  -32,594
  -34,378
  -36,243
  -38,194
  -40,235
  -42,372
  -44,609
  -46,951
New CAPEX, $m
  -10,821
  -11,524
  -12,070
  -12,584
  -13,103
  -13,631
  -14,172
  -14,730
  -15,307
  -15,907
  -16,533
  -17,188
  -17,875
  -18,597
  -19,357
  -20,158
  -21,002
  -21,892
  -22,832
  -23,823
  -24,868
  -25,971
  -27,135
  -28,362
  -29,656
  -31,020
  -32,457
  -33,971
  -35,566
  -37,246
  -39,014
Cash from investing activities, $m
  -18,385
  -18,945
  -20,215
  -21,488
  -22,799
  -24,151
  -25,549
  -26,999
  -28,502
  -30,065
  -31,691
  -33,386
  -35,154
  -37,000
  -38,930
  -40,948
  -43,060
  -45,271
  -47,588
  -50,015
  -52,558
  -55,225
  -58,022
  -60,956
  -64,034
  -67,263
  -70,651
  -74,206
  -77,938
  -81,855
  -85,965
Free cash flow, $m
  855
  5,242
  5,900
  6,638
  7,420
  8,243
  9,107
  10,009
  10,948
  11,923
  12,935
  13,012
  14,096
  15,219
  16,380
  17,580
  18,823
  20,109
  21,441
  22,820
  24,251
  25,736
  27,277
  28,878
  30,543
  32,275
  34,079
  35,958
  37,917
  39,960
  42,092
Issuance/(repayment) of debt, $m
  7,969
  12,085
  12,614
  13,150
  13,693
  14,245
  14,810
  15,393
  15,996
  16,623
  17,277
  17,961
  18,680
  19,434
  20,229
  21,065
  21,948
  22,878
  23,860
  24,895
  25,988
  27,140
  28,356
  29,639
  30,991
  32,416
  33,918
  35,500
  37,167
  38,922
  40,770
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
  12,085
  12,614
  13,150
  13,693
  14,245
  14,810
  15,393
  15,996
  16,623
  17,277
  17,961
  18,680
  19,434
  20,229
  21,065
  21,948
  22,878
  23,860
  24,895
  25,988
  27,140
  28,356
  29,639
  30,991
  32,416
  33,918
  35,500
  37,167
  38,922
  40,770
Total cash flow (excl. dividends), $m
  3,607
  17,327
  18,514
  19,788
  21,113
  22,488
  23,917
  25,401
  26,943
  28,546
  30,212
  30,973
  32,776
  34,653
  36,608
  38,646
  40,770
  42,987
  45,300
  47,716
  50,239
  52,876
  55,633
  58,517
  61,534
  64,691
  67,997
  71,458
  75,084
  78,882
  82,862
Retained Cash Flow (-), $m
  -1,674
  -5,171
  -5,509
  -5,744
  -5,981
  -6,222
  -6,469
  -6,723
  -6,987
  -7,260
  -7,546
  -7,845
  -8,159
  -8,489
  -8,836
  -9,201
  -9,586
  -9,993
  -10,421
  -10,874
  -11,351
  -11,854
  -12,386
  -12,946
  -13,536
  -14,159
  -14,815
  -15,506
  -16,234
  -17,000
  -17,808
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
 
  12,156
  13,005
  14,045
  15,132
  16,266
  17,448
  18,678
  19,957
  21,285
  22,666
  23,128
  24,617
  26,164
  27,773
  29,445
  31,184
  32,994
  34,879
  36,842
  38,888
  41,022
  43,248
  45,571
  47,998
  50,533
  53,182
  55,952
  58,850
  61,882
  65,055
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
 
  11,382
  11,329
  11,306
  11,175
  10,936
  10,590
  10,144
  9,607
  8,993
  8,314
  7,283
  6,574
  5,851
  5,130
  4,428
  3,759
  3,138
  2,572
  2,069
  1,631
  1,260
  951
  702
  506
  355
  243
  162
  104
  65
  40
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 is a media and technology company. The Company has two primary businesses: Comcast Cable and NBCUniversal. Its Comcast Cable business operates in the Cable Communications segment. Its NBCUniversal business operates in four business segments: Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks. Its Cable Communications segment consists of the operations of Comcast Cable, which provides video, high-speed Internet and voice services to residential customers under the XFINITY brand. Its Cable Networks segment consists of a portfolio of national cable networks. Its Broadcast Television segment operates the NBC and Telemundo broadcast networks. Its Filmed Entertainment segment primarily produces, acquires, markets and distributes filmed entertainment across the world, and it also develops, produces and licenses live stage plays. Its Theme Parks segment consists primarily of its Universal theme parks in Orlando, Florida and Hollywood, California.

FINANCIAL RATIOS  of  Comcast Cl A (CMCSA)

Valuation Ratios
P/E Ratio 21.7
Price to Sales 2.3
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 9.8
Price to Free Cash Flow 22.4
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 9.8% 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 4713.33 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 $187.2 billion.

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COMPANY NEWS

▶ How Disneys acquisition of Fox takes on Netflix   [06:20PM  American City Business Journals]
▶ The FCC just voted to repeal net neutrality. Here's Comcast's response   [03:15PM  American City Business Journals]
▶ What You Should Know About Net Neutrality   [11:11AM  Investopedia]
▶ What Will the Future Look Like Without Net Neutrality?   [Dec-13-17 08:38PM  MarketWatch]
▶ Disney Would Pay Up To $29 A Share For Fox Assets: WSJ   [05:37PM  Investor's Business Daily]
▶ [$$] How Justice Went Wrong on AT&T   [12:41AM  The Wall Street Journal]
▶ NBC's 'Today' in ratings lead after Matt Lauer's firing   [Dec-12-17 05:44PM  Associated Press]
▶ What Happened in the Stock Market Today   [04:46PM  Motley Fool]
▶ Disney's Fox Hunt Nears an End   [03:33PM  TheStreet.com]
▶ Disney deal with Fox has powerhouse potential   [09:10AM  American City Business Journals]
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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