Is It Too Late To Consider Buying Comcast Corporation (NASDAQ:CMCSA)?

Today we're going to take a look at the well-established Comcast Corporation (NASDAQ:CMCSA). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$46.73 at one point, and dropping to the lows of US$38.99. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Comcast's current trading price of US$40.57 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Comcast’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Comcast

Is Comcast Still Cheap?

Great news for investors – Comcast is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Comcast’s ratio of 10.47x is below its peer average of 13.74x, which indicates the stock is trading at a lower price compared to the Media industry. What’s more interesting is that, Comcast’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move closer to its industry peers, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Comcast look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 6.7% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Comcast, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since CMCSA is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on CMCSA for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CMCSA. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

So while earnings quality is important, it's equally important to consider the risks facing Comcast at this point in time. Every company has risks, and we've spotted 2 warning signs for Comcast you should know about.

If you are no longer interested in Comcast, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.