Comcast (NASDAQ:CMCSA) has had a pretty impressive nine-month run-up, nearly 50% from August of last year. It is even more impressive taking the size of the company with a $77 billion market cap into account. The market bid the stock up to a more reasonable value as all of the valuation metrics suggest that the stock is either fairly valued or overvalued suggesting that investors stay away from the stock now. Comcast does pay a decent dividend with a yield of 2.3%. Below is an in-depth look at the valuation metrics and stock chart.
Valuation: Comcast's trailing five-year valuation metrics suggest that the stock is fairly valued as there is a mixed message about the valuation metrics compared to their five-year averages. Comcast's current P/B ratio is 1.6 and it has averaged 1.3 over the past five years, with a high of 2.1 and low of 1. Comcast's current P/S ratio is 1.3 and it has averaged 1.6 over the past five years, with a high of 3 and low of 1.1. Comcast's current P/E ratio is 18 and it has averaged 18.9 over the past five years, with a high of 32.7 and low of 13.4.
Price Target: The consensus price target for the analysts who follow Comcast is $34. That is upside of 19% from today's stock price of $28.96 and suggests that the stock is fairly valued at these levels. This also suggests that the stock has limited upside and should be avoided at its current stock price.
Forward Valuation: Comcast is currently trading at about $29 a share with analysts expecting EPS of $2.21 next year, an earnings increase of 16% year over year, for a forward P/E ratio of 13.1. Taking a look at the company's publicly traded comparisons will give us a better idea of the stock's relative valuation. DirecTV (DTV) is currently trading at about $46 a share with analysts expecting EPS of $5.3 next year, an earnings increase of 21% year over year, for a forward P/E ratio of 8.8. Dish Network (NASDAQ:DISH) is currently trading at about $29 a share with analysts expecting EPS of $2.83 next year, an earnings increase of 1% year over year, for a forward P/E ratio of 10.1. Time Warner Cable (TWC) is currently trading at about $76 a share with analysts expecting EPS of $6.9 next year, an earnings increase of 23% year over year, for a forward P/E ratio of 11. The mean forward P/E of Comcast's competitors is 10, which suggests that Comcast is overvalued relative to its publicly traded competitors.
Earnings Estimates: Comcast has beat EPS estimates three times in the past four quarters. The company's EPS figures have come in between -7 cents and 6 cents from consensus estimates or about -17.5% to 14.6% from analyst estimates. The company has reported earnings that have differed from analyst estimates by a wide margin, which suggests that the stock may experience upside from earnings surprises.
Price Action: Comcast is up 18.41% over the past year, outperforming the S&P 500, which is up 2.2%. Looking at the technicals, the stock is currently below its 50-day moving average, which sits at $29.55 and above its 200 day moving average, which sits at $25.11.
Click to enlarge image.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.