TD Cowen has revised its price target for Comcast (CMCSA, Financial) shares down to $45 from the previous $46, while maintaining a Buy rating. This adjustment comes after the company reported strong financial results for the first quarter of 2025, yet experienced significant losses in Broadband subscribers.
Despite this setback, Comcast management remains optimistic about their strategy, which includes enhanced product offerings and strategic network improvements. However, they forecast some pressure on EBITDA as these changes are implemented.
CMCSA Key Business Developments
Release Date: January 30, 2025
- Revenue: Record revenue of $124 billion for 2024.
- Adjusted EBITDA: Record adjusted EBITDA of $38 billion in 2024.
- Adjusted EPS: Increased by 9% for the year.
- Free Cash Flow: Generated $12.5 billion for the year.
- Broadband Revenue: Grew 3% for the year.
- Convergence Revenue: Grew nearly 5% for the year.
- Wireless Revenue: Grew at a mid-teens rate, with 1.2 million new lines added.
- Business Services Revenue: Grew at mid-single digit rates, approaching $10 billion in revenue.
- Peacock EBITDA Losses: Improved by $1 billion.
- Net Broadband Subscriber Additions: Negative 139,000 in the fourth quarter.
- Adjusted EPS (Q4): Increased 14% to $0.96.
- Free Cash Flow (Q4): $3.3 billion.
- Capital Returned to Shareholders: $13.5 billion for the full year.
- Net Leverage: Ended the year at 2.3x.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Comcast Corp (CMCSA, Financial) achieved record revenue of $124 billion and record adjusted EBITDA of $38 billion in 2024.
- The company reported a 9% growth in Adjusted EPS and generated substantial free cash flow of $12.5 billion.
- Wireless revenue grew at a mid-teens rate, adding 1.2 million lines, reaching 12% penetration of the broadband customer base.
- Peacock achieved a $1 billion improvement in EBITDA losses, with strong revenue growth of 46% for the full year.
- Comcast Business is nearly $10 billion in revenue, with plans to acquire Nitel to enhance capabilities in serving multisite enterprise and midmarket businesses.
Negative Points
- Net broadband subscriber additions were negative 139,000 in the fourth quarter, indicating intense competition.
- The company faces challenges from fixed wireless expansion and the end of the ACP program.
- Increased competition from fiber operators and fixed wireless is expected to continue, impacting broadband growth.
- The company anticipates significant costs leading up to the opening of Epic Universe, impacting short-term financials.
- Peacock's NBA content addition may initially increase costs, requiring strategic adjustments to absorb expenses.
