Wondering if Comcast at around US$31.57 is trading at a bargain or a value trap? This article will walk you through what the current price might actually imply.
Over the last month, the share price has moved 13.5%, with year-to-date returns of 6.9%, even though the 1-year and 5-year returns sit at a 0.9% decline and 25.1% decline respectively.
Recent coverage around Comcast has focused on its role as a major US telecom and media player, with investors watching how its mix of broadband, cable TV and content businesses shapes expectations. This context helps frame why the stock has gained 0.6% over the past week and 13.5% over the past month, despite a 4.8% decline over three years.
On Simply Wall St, Comcast currently holds a valuation score of 5 out of 6, based on checks of whether the shares look undervalued on several metrics. Next we will walk through these methods, before circling back at the end to a broader way of thinking about what that valuation really means for you.
A Discounted Cash Flow, or DCF, model looks at the cash Comcast is expected to generate in the future and then discounts those amounts back to today to estimate what the business might be worth in total.
For Comcast, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $18.44b. Analysts provide explicit forecasts for several years, and Simply Wall St then extends these into longer term projections. By 2030, projected free cash flow is $15.71b, with intermediate annual estimates and extrapolated figures between 2026 and 2035 all expressed in today’s dollars using a discount rate.
When all those discounted cash flows are added up, the model arrives at an estimated intrinsic value of $83.14 per share. Compared with a current share price of about $31.57, the model implies the stock trades at a 62.0% discount, indicating Comcast may be materially undervalued on this DCF view.
For a profitable company like Comcast, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of earnings. What feels like a “normal” or “fair” P/E will usually be higher for businesses where the market is comfortable with earnings growth and risk, and lower where earnings are seen as more uncertain.
Comcast currently trades on a P/E of about 5.68x. That sits below the Telecom industry average of about 16.67x and also below the peer average of roughly 7.11x. On simple comparisons, the shares look inexpensive relative to both the wider industry and closer peers.
Simply Wall St also calculates a proprietary “Fair Ratio” for Comcast of 10.08x. This is the P/E level that would line up with the company’s own profile, including factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it is tailored to Comcast rather than a broad group, this Fair Ratio can be more informative than headline peer or industry averages alone.
Comparing Comcast’s current P/E of 5.68x with the Fair Ratio of 10.08x suggests the shares are trading below what that framework would point to.
Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, which are simple stories that tie your view of Comcast’s business to a set of revenue, earnings and margin assumptions, translate those into a Fair Value, compare that Fair Value with the current share price to help you decide whether to buy or sell, and then keep that view automatically updated when fresh news or earnings land.
Put differently, a Narrative connects Comcast’s story to a financial forecast and then to a Fair Value. Two investors can look at the same company and reach very different, but clearly explained, conclusions. For example, one Narrative might focus on challenging broadband trends and Warner Bros deal risk and arrive at a Fair Value around US$23.85, while another leans into broadband convergence, parks growth and media assets to support a Fair Value closer to US$43.62.
For Comcast, however, we will make it really easy for you with previews of two leading Comcast Narratives:
These sit on opposite sides of the debate and are both built from explicit assumptions on revenue, margins, valuation multiples and discount rates, so you can quickly see which one feels closer to your own view.
🐂 Comcast Bull Case
Fair value: US$43.62 per share
Implied discount to this fair value: about 27.6% versus the last close of US$31.57
Revenue growth assumption: 1.47% per year
Assumes broadband, parks and content can support long term earnings power even with lower margins, with the model using an earnings multiple of about 13.33x on future earnings and a discount rate of roughly 8.36%.
Builds in more cautious revenue growth and a trimmed multiple compared with earlier work, but still sees room for upside if broadband execution, parks performance and media assets track in line with these updated assumptions.
Reflects analyst research that has reset growth and valuation expectations following the Versant spin off, while still seeing Comcast as capable of supporting a higher value than the current share price under these inputs.
🐻 Comcast Bear Case
Fair value: US$23.85 per share
Implied premium to this fair value: about 32.5% versus the last close of US$31.57
Revenue growth assumption: 0.24% decline per year
Starts from softer revenue expectations and a lower future P/E of about 10.10x, with a discount rate of roughly 8.28%, which together point to a fair value below both the current price and the more optimistic narrative.
Captures concerns that slower top line trends, pressure on traditional video and media, and the impact of the Versant spin off on future earnings and cash flows could weigh on what investors are willing to pay.
Frames Comcast as already pricing in more growth and resilience than this model allows for, so anyone aligning with these assumptions would see the current share price as rich relative to the projected earnings path.
Taken together, these two narratives bracket a range of analyst views on Comcast, from a more constructive reset case to a more cautious one. The key for you is deciding which set of assumptions on revenue growth, margins, multiples and risk feels more realistic, and whether your own expectations sit closer to the bullish or bearish side, or somewhere in the middle.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include CMCSA.
