3 Reasons Comcast Can Outlast the Cord-Cutting Trend


Comcast can stay profitable thanks to strong fundamentals, diversified services, and customer relationships. 

It’s no secret that customers continue to cut the cord on cable television. So it’s not a far stretch to reason that this trend would cause companies like Comcast to struggle. But this hasn’t been the case so far.

In recent years, Comcast has embraced the cord-cutting trends and found ways to thrive regardless. The company recently made news after announcing it would offer its internet-only subscribers a free streaming device. Once the news broke, shares of Roku fell sharply. 

And Wall Street is definitely taking notice of this. Most analysts consider Comcast a strong buy and the average price target is $53.80, which represents an 18% upside. This week, Benchmark Company initiated Comcast as a buy, saying the company is “uniquely positioned” in its market. 

3 Reasons Comcast Will Continue to Do Well

Here are three reasons Comcast can continue to thrive in spite of the cord-cutting trend.

1. Comcast Can Compete With Roku and Apple

Comcast CEO Brian Roberts recently announced that internet-only subscribers would receive a free Xfinity Flex streaming device with their service. Typically, the device costs $5 per month. This could be a great incentive for new customers who are interested in getting started with streaming.

The company is also launching Peacock, its ad-supported streaming device. Peacock will allow users to watch Netflix, HBO, and Prime Video, and customers can pay to subscribe to additional services. This is similar to what Roku and Apple TV both offer. 

2. The Company Offers Broadband Internet Subscriptions

Comcast’s revenue from television subscriptions will likely continue to decline in the coming years. However, the company also offers internet subscriptions, and this service is expected to increase by 10%. Comcast’s broadband subscriptions currently account for 58% of its revenue. 

So Comcast will likely continue to lose cable customers. But the company has an opportunity to build new relationships with those customers through its internet-only subscriptions. 

3. Comcast’s Fundamentals Are Strong

And finally, analysts like Comcast because the company’s fundamentals are strong. Last quarter, the company saw its revenue grow by 24%. And the company generated more than $15 billion in positive free cash flow over the past year.

Cable subscriptions will continue to be a drag on the company’s earnings, but broadband subscribers can help offset some of this. And most importantly, the company acknowledges the cord-cutting trend and has a plan for how to deal with it. 

Final Thoughts

Of course, there are still risks ahead for Comcast. It’s unclear whether customers will embrace the company’s broadband internet services the way many analysts believe they will. And Comcast lost nearly 350,000 video subscribers during the first half of 2019.

But the stock is up 34% year to date. And the company seems prepared and equipped to deal with the many challenges that may lie ahead. So there may be plenty more good things to come from Comcast in the future. 

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