CMCSA: AI Flags Bearish Setup for Put Options

Comcast is a global media and technology company operating through two primary businesses: Connectivity & Platforms and Content & Experiences. Connectivity & Platforms provides broadband, wireless, video, and voice services mainly under the 'Xfinity', 'Comcast Business', 'Sky', and 'NOW' brands to residential and business customers in the United States, the United Kingdom, and Italy. Content & Experiences produces and distributes entertainment, sports, and news through brands including 'NBC', 'Telemundo', 'Universal', 'Peacock', and 'Sky', and owns and operates 'Universal' theme parks. The company differentiates itself in Connectivity & Platforms by offering bundled services and evolving network capabilities, including deploying technology for multigigabit symmetrical broadband speeds. In Content & Experiences, differentiation is achieved through a wide variety of programming and licensing content across various platforms, including linear television and streaming services.

CMCSA's technical outlook is decidedly bearish. The stock has experienced a significant downtrend over the past 90 days, plummeting from approximately $35.69 at the end of June to $26.98 recently, before a minor recovery to $27.45. The price is well below its 50-day SMA, which itself is declining, and there is no 200-day SMA available to assess longer-term trends, which is a bearish sign. Momentum indicators confirm this bearish sentiment; the MACD is deeply negative and diverging further below its signal line, and the RSI is depressed, hovering around oversold levels, although it has recently increased from 22.08 on October 30th to 25.36. The ADX is high at 46.10, indicating a strong trend, and prices have broken below the lower Bollinger Band, suggesting further downside potential. The recent small price increase on November 4th is likely a dead cat bounce within a well-established downtrend, and the technical indicators suggest continued weakness in the coming 1-3 months.

Comcast's MD&A presents a mixed financial picture. For the three months ended September 30, 2025, `Revenue` decreased by 2.7% to '$31,198 million' compared to '$32,070 million' in 2024. For the nine months ended September 30, 2025, `Revenue` remained relatively consistent at '$91,397 million' versus '$91,817 million' in 2024. The `Content & Experiences` segment saw a revenue decrease, while `Corporate and Other` experienced an increase. Adjusted EBITDA remained relatively flat, with a slight decrease of 0.7% for the three-month period. The `Residential Connectivity & Platforms` segment experienced a decline in Adjusted EBITDA margin, from 38.6% to 37.2%. `Net cash provided by operating activities` increased significantly for the nine months ended September 30, 2025, to '$24.8 billion' from '$19.6 billion' in 2024. This increase was primarily due to changes in operating assets and liabilities, and decreased payments of income taxes. However, `net cash used in financing activities` increased, driven by lower proceeds from borrowings and increased debt repurchases and repayments. Looking ahead, Comcast expects subscribers and audience ratings at linear television networks to continue to decline due to competition and shifting video consumption patterns, although they aim to mitigate this through growth in Peacock subscribers and advertising revenue. They also anticipate significant costs related to content and marketing at Peacock.

Comcast's Q2 2025 earnings call presents a mixed outlook. While broadband subscriber losses totaled 226,000, management expressed optimism about their new go-to-market strategy, noting 'early signs of stabilization in both connect activity and voluntary churn.' Roughly half of new customers chose the 5-year price guarantee, and there was a '20% increase in the share of new connects choosing our premium gig plus speeds,' contributing to 3.5% broadband ARPU growth. However, they anticipate 'moderation' in ARPU growth in the near term as they transition customers to the new pricing structure. Wireless saw a record quarter with 378,000 new lines added. Parks revenue increased 19% due to Epic Universe, but EBITDA growth was limited due to opening costs. Peacock delivered double-digit revenue growth and a nearly $250 million year-over-year improvement in EBITDA losses. The company highlighted a roughly $1 billion annual cash tax benefit for the next several years due to infrastructure investments. Overall, management's tone is cautiously optimistic, balancing short-term headwinds with long-term growth initiatives.

CMCSA's financial performance presents a mixed picture. Revenue has shown some volatility, starting at $30.06B in Q1 2024 and reaching $31.20B in Q3 2025, indicating moderate growth. The gross profit ratio has fluctuated, starting at 0.588 in Q1 2024, peaking at 0.613 in Q2 2025, and settling at 0.594 in Q3 2025, suggesting some inconsistency in profitability. Operating cash flow has remained robust and positive, with the latest quarter (Q3 2025) reporting $8.69B. Total debt has remained relatively stable, fluctuating between $96.57B in Q1 2024 and $101.53B in Q2 2025, before decreasing to $5.85B in Q3 2025, this is a huge decrease and may be due to accounting reasons or a large debt payoff. Overall, CMCSA demonstrates stable revenue and strong cash flow, but the inconsistency in gross profit ratio and the large debt payoff in Q3 2025 warrant attention.

The company presents a moderately bullish investment profile based on its financial data. Revenue has shown positive growth, indicating increasing market demand or successful market penetration. The gross margin is healthy, suggesting efficient cost management in production or service delivery. A strong return on equity (ROE) signals effective utilization of shareholder investments to generate profit. The price-to-earnings (P/E) ratio suggests the stock is trading at a premium, but this could be justified by the company's growth prospects and profitability. A manageable debt-to-equity ratio indicates a reasonable level of financial leverage. The current ratio, being greater than 1, demonstrates the company's ability to cover short-term liabilities with its current assets, further solidifying its financial health. Overall, the combination of revenue growth, healthy profitability metrics, and a solid balance sheet makes the company an attractive investment for the next 12 months, although the elevated P/E ratio warrants careful monitoring.