DCF Studio

    CMCSA · NMS · Communication Services

    Comcast Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 91.58

    Market price

    USD 22.74

    Implied upside

    +302.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Value Per Share

    Perpetuity growth
    USD 91.58+302.7%
    Exit multiple
    USD 32.84+44.4%
    Market price
    USD 22.74

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn9bn18bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 124.5bnUSD 125.3bnUSD 126.0bnUSD 126.8bnUSD 127.6bn+0.6%
    EBITUSD 22.8bnUSD 23.0bnUSD 23.1bnUSD 23.3bnUSD 23.4bn+0.6%
    NOPATUSD 18.0bnUSD 18.1bnUSD 18.3bnUSD 18.4bnUSD 18.5bn+0.6%
    Add depreciation & amortisationUSD 15.0bnUSD 15.1bnUSD 15.2bnUSD 15.3bnUSD 15.4bn+0.6%
    Less capital expenditureUSD -14.9bnUSD -15.0bnUSD -15.1bnUSD -15.2bnUSD -15.3bn+0.6%
    Less increase in working capitalUSD -769.5mUSD -774.3mUSD -779.1mUSD -783.9mUSD -788.8m+0.6%
    Free cashflow to firmUSD 17.3bnUSD 17.4bnUSD 17.6bnUSD 17.7bnUSD 17.8bn+0.6%
    Discount factor0.96980.91200.85770.80670.7586-
    Present valueUSD 16.8bnUSD 15.9bnUSD 15.1bnUSD 14.2bnUSD 13.5bn-5.4%
    Present Value Of The ForecastUSD 75.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.774Reported 0.662, pulled toward 1.0 (Blume)
    Cost of equity9.25%Risk-free + beta x equity risk premium
    Cost of debt5.00%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationUSD 80.7bn44.9% of capital
    Total debtUSD 98.9bn55.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.33%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 91.58

    82% of EV

    Forecast FCFF, final year
    USD 17.8bn
    Capex at depreciation, working capital in reinvestment
    USD 23.3bn
    Less reinvestment at g/ROIC (25.2% of NOPAT)
    USD -5.9bn
    Capitalised
    USD 17.4bn
    ROIC (reported)
    9.9%
    Terminal value, undiscounted
    USD 466.1bn
    Terminal value, discounted
    USD 353.6bn
    Enterprise value
    USD 429.1bn
    Less net debt
    USD 89.5bn
    Equity value
    USD 339.7bn

    Exit at 4.6x EBITDA

    Value per shareUSD 32.84

    64% of EV

    Terminal value, undiscounted
    USD 179.0bn
    Terminal value, discounted
    USD 135.8bn
    Enterprise value
    USD 211.3bn
    Less net debt
    USD 89.5bn
    Equity value
    USD 121.8bn

    Spread between methods: 94%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.33%155.10178.47214.47277.31415.45
    5.33%108.49118.24131.33149.94178.57
    6.33%81.2085.8291.5999.01108.97
    7.33%63.2865.5768.2871.5775.66
    8.33%50.6151.7152.9654.4156.11

    Outlined: this model. Green text: above today's price of 22.74. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year0.6%-32.2%-32.8pp
    EBIT margin18.3%5.3%-13.0pp
    Discount rate6.3%12.8%+6.5pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.