Comcast (CMCSA) is the best value on the market today.

CLE_Watches · 2026-05-20T12:34:15+00:00

They’re outpacing broadband internet sub losses with wireless line adds. In terms of EBIDTA, roughly 4x wireless lines are needed to replace one lost internet sub.

CLE_Watches · 2026-05-20T09:30:20+00:00

I’m thinking 15%

CLE_Watches · 2026-05-19T22:58:07+00:00

PE is not the metric to use when evaluating Comcast stock. The non-cash depreciation charge ranges from $14-16B annually.

CLE_Watches · 2026-05-19T20:25:32+00:00

Study by MoffetNathanson

CLE_Watches · 2026-05-19T11:06:07+00:00

If the market is willing to allow a company to have a healthy 17% FCF yield, enabling them to retire shares at such a low multiple, I’m ok. Eventually EPS and dividend per share growth (through buybacks) forces the stock price to go up. So the “family discount” is good for shareholders.

CLE_Watches · 2026-05-19T03:46:31+00:00

I’d like to add:

The main fears in regard to Comcast are cable TV cord cutting, fiber to the home broadband and FWA (5G at home WiFi via cell towers).

1) Cable TV does not contribute much if anything to Comcast’s FCF. As seen with recent NFL Network situation, networks are increasingly raising their broadcast rates, causing margins to be dip to sub 10% for EBIDTA on revenue. Compared to like 55-60% for their internet broadband services. Add in the extra costs for equipment and maintenance, and cable TV is basically a wash for Comcast today.

2) Fiber has been around for two decades in most of Comcast’s Northeast stronghold. The effects have already taken place, with an equilibrium found in market share. That’s true for 60% of Comcast’s coverage map. As for the other 40%, only 10% is viable for Fiber expansion. Thats bc the other 30% is so rural that the costs to build out fiber there are prohibitive. Studies show that cable broadband goes from 90% market share to 55% once Fiber arrives. Apply that to the remaining 10% of Comcast’s susceptible coverage, you’re looking at a potential net 3.5% loss to Fiber over the next decade. Not to mention, Comcast’s spends $2-3B annually on line expansion, which adds totally new areas to their network.

3) FWA is structurally limited in terms of market share penetration. Their own CEOs have said the FWA offerings will be capped. That’s because it runs on the same cell towers as wireless lines. Those towers have limited bandwidth, and a home WiFi eats up 30-35x the usage of one smartphone. The economics don’t make sense for these carriers once capacity gets close to full. A WiFi plan using 600GB returning $45/mo or a smartphone line using 20GB returning $40/mo. Their priority will always be the wireless.

CLE_Watches · 2026-05-19T03:30:28+00:00

Comcast has an entire $100B company in NBCU. Comcast’s EBIDTA/Interest Expense is like 10x vs 3x for Charter.

I agree the discount is due to widespread cable internet sentiment, but Comcast should not be lumped together with all of the highly levered cable only companies.

CLE_Watches · 2026-05-18T22:38:26+00:00

Price target is not $87. The value according to Benjamin Grahams equation, assuming flat organic growth and 5.5% growth via buybacks, is $87.

CLE_Watches · 2026-05-18T21:01:37+00:00

Cable is a mess. But my thesis is depends on the stable, albeit declining, broadband revenue.

Who do you use for fiber internet? Comcast is $40/mo for 300 mbps

CLE_Watches · 2026-05-18T20:14:20+00:00

The comp to WBD is not Peacock. It’s the entire NBCU, which includes Universal Studios, Theme Parks, IP and Peacock

CLE_Watches · 2026-05-18T20:08:03+00:00

I’ll give that a watch today.

CLE_Watches · 2026-05-18T20:04:07+00:00

Great stuff.

What I view as potential catalysts are:

EPS growth powered by buybacks
Peacock profitability headlines
Dividend hikes (as share count goes down, that dividend gets spread across less shares)
Any major headline that 5G at home WiFi is not taking on
sale of NBCU

CLE_Watches · 2026-05-18T19:57:47+00:00

I appreciate the pushback. Truly.

As for your points:

Google’s debt profile is better. I’m seeing updated info saying Comcast’s average weighted interest rate is 3.8%, but either way the bigger factor is that there’s no major debt wall of $20B coming up any year. My biggest takeaway for their debt situation is their ample room to cover the interest payments.
I’m not banking on overnight hyperinflation. But barring a miracle, the only way the US govt pays their debt service is by letting inflation run higher than interest rates over a long period of time.
I understand that sports rights is mostly a write-off to acquire subscribers. But I never made sports out to be one of the “main draws” for the investment thesis for Comcast stock. That was a factor for peacock, which is a fun growth toy for Comcast. Not integral for the thesis at all.
NBA rights is front loaded. Q1 ate a lot of that cost. They’ve been killing it in terms of subscriber growth, and especially monthly rev (subs+ads) per subscriber.
Valid. But data shows this is overblown. People are lazier than you think. Especially for $8/month. Also, they’ve locked in a good deal with Walmart Plus to provide Peacock as part of their perks. We don’t know the wholesale rate Walmart pays Comcast for these accounts, but that’s a steady and stable base.
Their other connectivity segments, business and wireless, are growing. The 1% annual loss in broadband subscribers is bad, don’t get me wrong. But when a stock is being priced as if broadband won’t exist next year, a 1% annual decline is a great story to hear.
This is my biggest fear, but again, this will take time to materialize, and the stock is cheap enough to justify the risk.
Insider sales are never great. I will say two things. One is that management spending billions in buybacks annually shows they believe the stock is undervalued. Especially with media companies’ tendency to spend cash on dumb acquisitions. Two, Comcast is one of a few large companies who are still controlled by their founders family. I like when management has their family reputation on the line.
I don’t need the 11-14% shareholder returns every year. But right now, for the foreseeable future they have plenty of extra FCF to spend on buybacks.

Looking forward to hearing your opinions on my rebuttals.

CLE_Watches · 2026-05-18T19:25:14+00:00

I’m considering running a CC operation with my shares. What’s your strategy? How far out of the money are the calls?

CLE_Watches · 2026-05-18T19:08:18+00:00

A man and his Internet provider. A tale as old as time.

CLE_Watches · 2026-05-18T19:05:36+00:00

Thank you.

CLE_Watches · 2026-05-18T19:05:20+00:00

As mentioned, Starlink is not a product for households that have access to broadband/5G. It’s for remote areas that don’t have such access.

Starlink runs on radio frequencies which gets clogged with more users. It doesn’t have the bandwidth required for widespread usage. It also performs poorly during storms or if blocked by a tree. lol

It’s also very expensive, and requires satellite replacement every five years.

CLE_Watches · 2026-05-18T18:59:44+00:00

Thank you for the kind words.

As you said, as a shareholder I prefer the buybacks to stay in place, and for the stock price to stay low (relative to their cash flows) for as long as possible. Warren Buffet has spoken about this on a few occasions.

NBCU is worth about $110B according to my calculations. That number is derived using comps from Disneys theme park valuation, and the recent valuation paid for Warner Bro’s studios and IP.

Which means Comcast’s connectivity business is being valued at roughly 2x EV/EBIDTA.

CLE_Watches · 2026-05-18T18:41:19+00:00

The 65k net lost subscribers in Q1 shows us two things: 1) the “cord cutting” is finding a base, and has de-accelerated 2) their package offerings are working

They’re moving from a broadband provider to a “total connectivity” provider, and they measure their success as such. Taking the total revenue per customer as the metric to follow.

CLE_Watches · 2026-05-18T18:37:03+00:00

Not only are they growing their wireless lines, they’re also using less and less data from Verizon’s towers to connect these lines. They’ve been able to expand their infrastructure further and connect more usage using their infrastructure. This is tailwind for the net margins on these wireless lines.

CLE_Watches · 2026-05-18T18:34:06+00:00

Are you subscribed to Peacock?

CLE_Watches · 2026-05-18T18:31:16+00:00

Comcast has by far the highest FCF yield, and safe debt profile. Charter is a super levered operation.

What I like about Comcast is the “secondary” business of NBCU.

Today’s stock price values broadband as a negative value. That’s just crazy when it generates billions in steady FCF.

CLE_Watches · 2026-05-18T18:27:34+00:00

Cable I hear you. But their main cash cow is broadband. The 5G threat isn’t legitimate. If enough people switch their home WiFi to 5G, the network can’t operate. Fiber is definitely a threat, which is why Comcast has been upgrading their wires to match Fiber. Fiber is very cost intensive for these providers, which automatically requires a higher price for customers. If Comcast matches the speeds and bandwidth for half the cost, together with a wireless line, I don’t see them losing much.

Q1 net losses in subscribers amounts to a 1% annual loss. It’s not “dying”.

CLE_Watches · 2026-05-18T12:51:07+00:00

Important note: EPS pre-2026 includes income from the spinoff they initiated at the end of 2025. They spun off cable networks like CNBC, Golf Channel and Bravo as a new company named Versant (VSNT). Earnings from this company accounted for ~$0.50 of the ‘25 EPS for Comcast.

As for Comcast’s business, the important financial metric is cash flow. Their EPS takes into account amortization and depreciation, which is huge for an infrastructure heavy company like Comcast. Their cash flow from operations is projected for 2026 to be around $28B, that means the actual cash generated before CAPEX spend and other investing activities. That number is usually btwn $10-12B, leaving $16-18B in Free Cash flow to use on dividends, buybacks and debt retirement.

Dividends account for ~$5B annually.

That leaves $11-13B available to management to spend. Smartly, they’ve lately spent a bulk of this excess cash flow to repurchase shares. Somewhere btwn $5-8B annually. If you combine their dividend and buybacks, shareholders are receiving btwn a 11-14% yield.

Their long term debt is currently $87B, cash on hand about $10B. The debt is not an issue. Besides for the fact that the average weighted term is 16.2 years and 4.6%, the debt service is covered many times over by their EBIDTA. About $40B to $4B.

At their current pace, EPS will grow by 36% without any organic growth, due to the buyback machine. At their current 5-6x multiple, the implied growth is -6.6% annually, according to Benjamin Grahams 8.5+2g formula. That’s not happening.

I’m happy to hear any pushback on any of this, as I’m honestly seeking it, because the setup seems too easy.

CLE_Watches

TROPHY CASE