On Demand Services Constitute a Small Portion of Comcast's Stock

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 |  Includes: CMCSA, DISH, NFLX, T, TWC
by: Trefis

Comcast (NASDAQ:CMCSA) offers Video on Demand (VOD) and Pay Per View (PPV) services to its customers, and competes with Time Warner Cable (NYSE:TWC), DirecTV (DTV), Dish Network (NASDAQ:DISH), Netflix (NASDAQ:NFLX). We currently have a Trefis price estimate of around $19 for Comcast’s stock, about 1% above the current market price of around $18.

Trefis members have created forecasts for two key drivers of Comcast’s stock over the last week: (1) Paid % of On-Demand Views and (2) On Demand Views. The members’ forecasts suggest that Paid % of On-Demand Views will trend slightly above the Trefis estimate, while On Demand Views will remain in line.

We estimate that PPV/On-Demand Services account for only 3% of the $19 Trefis price estimate for Comcast’s stock. Below are charts showing recent estimates created by Trefis members for the two drivers in detail: (1) Paid % of On-Demand Views and (2) On Demand Views.

1. Paid % of On-Demand Views

The average of forecasts for Paid % of On-Demand Views created by Trefis members indicated a projected decrease from around 6% in 2010 to around 5% by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from 5.5% in 2010 to 4% by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Comcast’s stock. In the past, Paid % of On-Demand Views has decreased from around 9% in 2005 to 6% in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Comcast’s stock to Paid % of On-Demand Views.

2. On Demand Views

The average of forecasts for On Demand Views created by Trefis members is in line with Trefis estimates. The baseline Trefis estimate projects an increase from close to 5 billion in 2010 to around 10 billion by the end of the Trefis forecast period. In the past, On Demand Views has increased from about 0.6 billion in 2004 to 4.1 billion in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Comcast’s stock to On Demand Views.

Disclosure: No positions