Comcast Corporation (CMCSA)

Total return at 5 years: 29.0%/year = 23.8% appreciation + 5.2% dividend. The target price ($60) is ex-dividend; the $8 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $104 · Multiples $55) exceeds the market price ($21).

Today — with margin of safety: at $21 trades ~62.6% below its value discounted to today (~$55) — the wide discount we require (≥38%, equivalent to a ~15% annual return); the risk is covered by the margin, not the rate.

At 5 years — Muy infravalorado: the target price ($60) plus dividends yield above the required average return (10%) — the business compounds.

The bridge: the return at 5 years comfortably exceeds the risk-free rate (4.5%) — and the discount reaches the required margin of safety.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($21) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The market discounts less growth (-19.7%/year) than we project (2.0%/year) → if the base case holds, there is margin: perception is more pessimistic than the estimated reality.

That growth implies ~$6.2 bn of owner earnings in year 5 (vs ~$20.6 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on EV/EBIT. In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Comcast combines two businesses of different economic natures —Connectivity & Platforms (broadband, mobile service and subscription video, capital-heavy) and Content & Experiences (Media, Studios and Theme Parks, with content rights economics and physical leisure assets)— so the model is built as a sum of the parts: each segment projects its own margin and contributes to a blended exit multiple according to each segment's weight in the common block, rather than a single multiple on the consolidated figure. Year 0 is the TTM ended 30-Jun-2026 taken from XBRL, which mixes six months with Versant Media Group still consolidated (separated on 2-Jan-2026) and six months without it; there is no numerical revenue or earnings per share guidance in the Q2'26 release (only qualitative commentary), so year 1 is anchored to the average of the historical band of reported growth (FY23 +0.1%, FY24 +1.8%, FY25 0%, TTM +0.6%), not to the quarter's pro forma growth (+4.7%, inflated by the World Cup and compared against a base that still included Versant and Sky Germany). The EBIT margin starts at 14.7% (real TTM) and expands gradually on the operating leverage of mobile service and Business Services, and on Peacock's newly achieved profitability, offsetting the structural pressure of linear video and residential broadband. Share repurchases —material in recent history (~$5.6bn TTM)— have been paused since 29-Jun-2026 while the announced spin-off of NBCUniversal and Sky is executed; the share path reflects a pause in year 1 and more moderate buybacks from year 2, not an extrapolation of the historical pace. The tax rate is the TTM effective rate from XBRL (23.7%). Maintenance capex is set at 85% of total capex: the network is mature (consolidated revenue practically flat, 0-2% year over year over the last three fiscal years) and almost all capital spending replaces existing infrastructure, with little incremental growth capex beyond the investment declared in the new broadband market strategy. The bear case is derived from the segment breakdown in this same record (§5 R6: the bear case varies the speed of deterioration and must stress year 1, and its path must tell what its label declares). Starting from current weights and rates —Connectivity & Platforms 62.7% of combined revenue growing −3.0%, Media 21.0% at +15.6% ex-World Cup, Studios 8.7% at +25% and Theme Parks 7.6% at +2.7%—, the bear case accelerates the connectivity decline to −5.0% a year and slows the three that are growing (Media to +2%, Studios to 0%, Theme Parks to +0.5%), which is exactly the conjunction the label describes. The resulting consolidated revenue falls −2.7% in the first year and moderates to −1.2% in the fifth, because the contracting segment keeps losing weight (62.7% to 55.2%): the moderation is not a recovery in the business but the arithmetic of the mix. The previous path left revenue flat-to-growing (124.9 to 126.3), that is, it described a more benign world than its own label declared.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $60 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $21, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $60 in 5 years plus $8 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $55. Against the current market price ($21), the margin of safety is 62.6% (trades below the maximum → there is margin) and the total return at that price would be 29.0% annually.

• Multiple below the floor of the band. Trades well below the 12-16× EV/EBIT range of the media conglomerate archetype, even with the discount for moat erosion already factored into its position within the band.
• High dividend yield. ~5.1% at the current price, with historical annualized growth of ~6.5%.
• Market price below the adverse scenario. The current price sits below even the model's adverse-scenario 5-year value.
• Holding/conglomerate discount. The market does not separate the value of connectivity from that of content and punishes the whole with the multiple of the perceived lower-quality business.
• Spin-off execution risk. No closing date disclosed for the separation of NBCUniversal and Sky; transaction costs and management distraction are a real risk, not merely a perceived one.
• Pending re-rating catalyst. A successful spin-off could close the conglomerate discount by letting the market value each piece separately, as already happened (partially) with Versant.
• Attractive FCF yield. TTM owner earnings over the current market value implies a high cash yield for a business with moderate consolidated growth.

Each margin over sales, year by year: historical (solid line) → projection (dotted).

• ✕ ROIC exceeds the cost of capital (~10%)
• ✓ CFROIC backs up the ROIC (134%, cash vs. accruals)
• ✕ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• ROIC below the bar. ~8.1% against the 10% bar, explained by goodwill and franchise rights accumulated in historical M&A (NBCUniversal, Sky), not by weak operating returns.
• Solid owner earnings. ~US$18.7bn TTM, with healthy cash conversion on reported net income.
• Low SBC. Stock-based compensation equals just ~1.1% of TTM revenue, with no material dilution trap to correct for in the metric.
• Invested capital inflated by historical M&A. Goodwill and franchise rights exceed a combined US$112bn on the balance sheet, the denominator that penalizes level ROIC.
• Operating leverage in Business Services and mobile service. Adjusted EBITDA margins above 56% in Business Services are evidence of genuine scale in that segment.
• Rising programming cost pressure. Spending on sports programming (NBA, FIFA World Cup) is rising faster than in prior years, compressing Media's margin in the near term.
• Predictable cash generation. The combined business generates consistent free cash flow quarter to quarter, even as the segment mix shifts.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

Connectivity & Platforms' drivers read on volume: it loses broadband and video customers structurally (cord-cutting and fiber/5G competition) while gaining mobile lines at an accelerating pace (penetration still under 7% of the footprint's addressable lines). Average monthly revenue per customer offsets part of the volume loss with mix and price. Peacock is the Content & Experiences driver with the clearest trajectory: it went from 28 to 44 million paid subscribers between 2023 and 2025 and reached its first quarter of positive Adjusted EBITDA in Q2'26 (US$189 million).

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (30-jun-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Mobile convergence. Penetration still under 7% of the footprint's addressable lines; the company's best quarter of net mobile service additions in its history in Q2'26.
• Business Services Connectivity. Sustained high-single-digit growth, with Adjusted EBITDA margins above 56%.
• Peacock. Paid subscribers went from 28 to 44 million between 2023 and 2025, with newly reached profitability as the next milestone.
• Epic Universe / Theme Parks. The new park drove Theme Parks in 2025, though the Q2'26 release acknowledges near-term softness.
• Residential video and broadband. Both in structural volume decline, the biggest drag on consolidated growth.
• Studios. Strong but volatile growth, dependent on box office success quarter to quarter.
• Media ex one-off events. Media's reported growth is inflated by the World Cup, the Olympics, and the Super Bowl; excluding those events, growth is more moderate.

• Dominant broadband and mobile network. 65 million homes and businesses passed by the network, with symmetrical multigigabit deployment underway.
• Long-term sports rights. NBA, NFL, and Olympic Games secured well into the next decade, with exclusivity over high-demand content.
• Diversification between connectivity and content. Two businesses with distinct cycles and drivers under a single balance sheet, which cushions part of each one's individual cyclicality.
• Structural cord-cutting. Linear video keeps losing subscribers steadily (-1.3 million in 2025) and drags down cable network distribution revenue.
• Fiber and fixed 5G wireless competition. AT&T, Verizon, and T-Mobile compete directly for the broadband customer within Comcast's own footprint, in some cases with public financing involved.
• Announced spin-off of NBCUniversal and Sky. Acknowledges that the business's two economics no longer share enough synergies; it simplifies the portfolio but adds execution uncertainty.
• Peacock reached profitability. First quarter of positive Adjusted EBITDA in Q2'26, after years of losses that offset the strength of the rest of Media.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Structural debt is what is exposed to the contraction phase of the cycle; operational debt (leases, matched funding) self-liquidates with the business.

• !Leverage (net debt / EBITDA)Net debt / EBITDA 2.4x
• !Interest coverage (EBIT / interest)4.3x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 134% of ROIC
• ✕Value creation (ROIC − 10% bar)-2pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.8x — no over-investment
• !Float / working capitalConsumes cash $0.8 bn (positive WC)
• ✓Dilution (SBC % of revenue + shares)SBC 1.1% of revenue

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Total debt. ~US$90.4bn against cash and equivalents of ~US$7.7bn; the business generates enough operating cash for debt service with no apparent strain.
• Ongoing deleveraging. Net debt repayments of several billion dollars in the first half of 2026, in line with the priority of simplifying the balance sheet ahead of the spin-off.
• Interest coverage. TTM EBIT covers TTM interest expense with wide headroom (several times over).
• Available cash. US$7.7bn in cash and short-term investments, enough to cover near-term operating needs without relying on credit lines.
• Low stock-based compensation. ~1.1% of revenue, with no material per-share dilution pressure on the balance sheet.
• Complexity of the pending separation. The spin-off of NBCUniversal and Sky will involve reallocating debt and assets between the two resulting companies, a process with non-trivial execution risk.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Dual-class control. Brian L. Roberts controls 33 1/3% of the voting power with ~0.25% of economic ownership, via Class B shares.
• Recent disciplined divestiture track record. Versant and Sky Germany were separated/sold in 2026 without apparent value destruction; the spin-off of NBCUniversal and Sky is now announced.
• Buyback paused for the separation. The buyback program was paused on June 29, 2026, prioritizing execution of the spin-off over near-term capital return.
• Growing, consistent dividend. Raised every year since at least 2022, with annualized growth of ~6.5%.
• Recent co-leadership. Bringing on Mike Cavanagh as co-CEO alongside Roberts is a relatively new leadership structure change, without a long track record of its own yet.

• Conglomerate/holding discount: the market does not separate the value of Connectivity & Platforms from Content & Experiences, and punishes the whole with the multiple of the perceived lower-quality business.
• Structural fear extended indiscriminately: the real decline in video and broadband customers is generalized to the entire portfolio, including pieces that are growing (mobile service, Business Services, Theme Parks, Peacock).
• Dual-class corporate governance: Brian L. Roberts controls 33 1/3% of the voting power with minimal economic ownership, which reduces interest from institutional investors oriented toward activism or a change of control.
• Execution uncertainty around the announced separation of NBCUniversal and Sky, with the buyback program paused and no closing date disclosed in the release.

Not all of the gap is mispricing: linear video and residential broadband are truly declining, and that is a real risk, not merely a coverage problem. But the current price requires that even the model's adverse scenario fail to hold in order to justify the expected return, which suggests the market is over-extending the dominant piece's structural fear to the rest of a portfolio that, in aggregate, is still growing.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at +10%/year (+61% total): the margin of safety protects the downside. The bull (+39%/year, +425% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Structural decline of video and broadband. The segment with the largest weight in the sum-of-the-parts value keeps losing customers steadily to fiber and fixed 5G wireless.
• Execution of the NBCUniversal and Sky spin-off. No closing date disclosed; transaction costs, management distraction, and the paused buyback are concrete risks, not merely perception.
• Dual-class corporate governance. Roberts controls 33 1/3% of the vote with minimal economic ownership, limiting Class A shareholders' influence over strategic decisions.
• Rising sports programming cost. Payments for NBA, NFL, and event rights such as the World Cup are rising with no guarantee of full pass-through to distribution fees.
• Regulatory risk over broadband and content distribution. Recent litigation reversed an FCC broadband reclassification; state-level initiatives persist that could create an inconsistent regulatory patchwork.
• Dependence on one-off sporting events for Media growth. Much of Media's recent growth is explained by the World Cup, the Olympics, and the Super Bowl, events that are not recurring every year.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  Fails the quality gate: narrow moat, eroding.

• Peter Lynch Growth at a reasonable price (GARP)

  A slow grower growing 2% at a multiple/growth of 4.3 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Earnings yield 12% (EBIT/EV) + ROIC 8% → falls outside the Magic Formula.

• Howard Marks Perception vs reality + cycle

  The price discounts -20% vs our 2%: perception is more pessimistic than reality, with an identified source of the discount.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor +3%/yr, bull-scenario ceiling +35%/yr over 5y and a +63% margin → capital protected, asymmetry in your favor.

• Pat Dorsey Moat strength (Five Rules)

  A narrow moat, eroding; sources: intangibles, efficient scale, switching costs, network effects → fails the Five Rules.

• Aswath Damodaran Expectations implied by the price

  Justifying the price requires discounting -20%, within what we project (2%) — the story squares with the numbers.