Broadband Strife Keeps Comcast Stock (CMCSA) on a Short Leash

Shares of media giant Comcast (CMCSA) are down almost 25% year-to-date, lagging both industry peers and the broader market. On the surface, the valuation looks compelling—trading at single-digit earnings multiples—but deeper operational challenges in its broadband segment continue to weigh on the bullish story.

Comcast’s media and theme park businesses show encouraging trends, and broadband remains the company’s financial backbone. Persistent subscriber losses, sustained ARPU declines, and intensifying competitive pressures create significant uncertainty around future profitability. Given the topsy-turvy price action in recent months, not to mention a deepening decline in its stock price, I’m maintaining a Neutral stance on CMCSA.

Mixed Performance Across All Segments in Q3

According to its latest quarterly results published last month, Comcast delivered a mixed performance marked by both areas of strength and ongoing challenges. The company posted solid gains in its wireless and theme parks divisions and achieved record free cash flow, signaling underlying momentum. However, these positives were offset by continued weakness in the Connectivity & Platforms segment, a decline in broadband subscribers, and pressure on average revenue per user (ARPU), resulting in an overall balanced but cautious outlook.

For Q3 2025, Comcast reported total revenue of $31.2 billion—down roughly 3% year-over-year but ahead of analyst expectations. The revenue beat was driven by stronger-than-anticipated results in the Media segment, partially offset by underperformance in Connectivity & Platforms.

Adjusted EBITDA came in at $9.7 billion, in line with expectations, as weak broadband results were offset by solid performance in Content & Experiences. 

However, the operational picture remains cloudy. Broadband net losses of 104,000 were smaller than expected but still negative, while average revenue per user (ARPU) declined modestly. Management acknowledged higher operating expenses tied to a new go-to-market strategy aimed at stabilizing subscriber trends—an effort that will take time to bear fruit.

Comcast Trades Margin for Market Share

Comcast’s new strategy focuses on simplifying pricing, bundling broadband with wireless services, and offering five-year price locks to retain customers. While this could help stem subscriber losses, it comes at the expense of near-term pricing power and profitability.

Management has recently indicated that Broadband ARPU is expected to decline by another 100 basis points in Q4 2026, resulting in a growth rate of nearly 1.4%, compared to an earlier forecast of around 3.5%. Compounding the issue, Comcast will skip its traditional first-quarter rate hike next year, removing another tailwind for revenue growth.

These pricing actions suggest that Comcast has recognized a deeper issue: the need to reprice its broadband offerings by as much as 15% to remain competitive. This strategy could stabilize volumes, but it will likely weigh on margins well into 2026. I estimate monthly broadband ARPU may fall from roughly $70 to closer to $60, a material hit to top-line and EBITDA growth.

In the short term, I expect negative broadband EBITDA growth across the next few quarters, as incremental marketing and product expenses are necessary to restore competitiveness.

Competition Intensifies Across Broadband and Wireless

The competitive landscape for broadband remains challenging. Telecom providers AT&T (T) and Verizon (VZ) continue expanding their fiber networks, supported by government subsidies and infrastructure incentives. Both are only halfway through long-term buildout plans, suggesting further pressure on cable broadband penetration rates.

Meanwhile, T-Mobile (TMUS) and Verizon continue to add approximately 400,000 fixed wireless access (FWA) subscribers per quarter, offering an alternative for customers seeking more affordable or flexible internet options. Even satellite broadband is becoming a viable threat in rural markets, with the capacity to serve up to 20 million households over the long term.

These forces have driven Comcast’s broadband penetration rate down for 14 consecutive quarters, a trend that is unlikely to reverse soon. While management continues to emphasize its bundled offerings, I believe it will take several quarters before we see evidence of stabilization.

Broadband Weakness Limits Comcast’s Outlook

Not all parts of Comcast’s portfolio are under pressure. The Media and Studios division delivered solid results in Q3, aided by higher advertising revenue tied to strong sports programming and upcoming events, including the Winter Olympics and the new NBA rights deal.

The Theme Parks business remains another bright spot, with steady visitor growth and healthy margins, though the much-anticipated Epic Universe expansion has been slower to ramp than expected.

Still, these positive contributors are unlikely to offset the drag from broadband in the near term. As a result, I see limited upside for total company EBITDA growth through 2026.

Comcast’s Cheap Valuation Masks Deeper Risks

At face value, Comcast’s valuation appears attractive. The stock trades at a P/E ratio of 6.3x—about half the sector median of 12.4x—and an EV/Sales multiple of 1.56x, also below the sector average of 1.93x.

Applying a blended valuation approach that incorporates P/E, EV/Revenue, and a five-year DCF revenue exit, Comcast’s fair value is estimated at $37 per share, suggesting approximately 34% upside from current levels.

That said, this potential remains largely theoretical until broadband performance shows meaningful improvement. Valuation alone is unlikely to appeal to investors, and thereby to re-rate the stock while the company’s core business continues to weaken. Investors will want to see clear signs of subscriber stabilization and ARPU recovery before assigning a higher multiple.

Is CMCSA a Good Stock to Buy Now?

According to leading Wall Street analysts tracked by TipRanks, the stock holds a Moderate Buy consensus rating based on 23 analyst reviews, including 8 Buys, 14 Holds, and 1 Sell. CMCSA’s average stock price target is currently $36.68, implying almost 34% upside over the coming year.

See more CMCSA analyst ratings

CMCSA’s Value Case Hinges on Broadband Recovery

Comcast’s diversified portfolio offers some cushion, but the company’s long-term trajectory remains tied to its broadband segment. While management’s new pricing and bundling initiatives aim to slow subscriber losses, the path to stabilization will likely take several quarters—and could bring additional near-term margin pressure.

The stock appears inexpensive compared to peers, yet without a clear turnaround in broadband ARPU or subscriber trends, a catalyst for sustained outperformance remains elusive.

Until tangible improvements emerge in broadband fundamentals, I maintain a neutral stance on Comcast—recognizing the underlying value but waiting for confirmation in the data.