Comcast Corp Stock Buy Recommendation Reiterated (CMCSA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Comcast (Nasdaq:CMCSA) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+ . The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

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Highlights from the ratings report include:

• Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 6.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• The debt-to-equity ratio is somewhat low, currently at 0.82, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.07, which illustrates the ability to avoid short-term cash problems.
• Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 48.03% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
• COMCAST CORP has improved earnings per share by 19.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, COMCAST CORP increased its bottom line by earning $2.29 versus $1.51 in the prior year. For the next year, the market is expecting a contraction of 0.4% in earnings ($2.28 versus $2.29).
• The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Media industry average, but is greater than that of the S&P 500. The net income increased by 17.9% when compared to the same quarter one year prior, going from $1,287.00 million to $1,518.00 million.

Comcast Corporation provides entertainment, information, and communications products and services in the United States and internationally. The company's Cable Communications segment offers video, high-speed Internet, and voice services to residential and business customers. Comcast has a market cap of $87.38 billion and is part of the services sector and media industry. The company has a P/E ratio of 18.8, above the S&P 500 P/E ratio of 17.7. Shares are up 10.4% year to date as of the close of trading on Tuesday.

You can view the full Comcast Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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