Last update on 2024-06-06

Comcast (CMCSA) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Comcast (CMCSA) receives a high Piotroski F-Score of 8/9 in 2023, indicating strong financial health and investment potential.

Short Analysis - Piotroski Score: 8

We're running Comcast (CMCSA) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score is used to measure the financial strength of a company based on 9 criteria that include profitability, liquidity, and leverage. Comcast (CMCSA) has been evaluated using this model and has scored an impressive 8 out of 9. They are showing positive results in net income, cash flow from operations, and return on assets. Additionally, their leverage ratio and asset turnover have shown positive trends, and they have reduced the number of outstanding shares which is favorable. However, the current ratio has declined, indicating a potential issue with short-term liquidity.

Insights for Value Investors Seeking Stable Income

Given the high Piotroski F-Score of 8, Comcast (CMCSA) appears to be a strong investment candidate with several positive indicators such as profitability and efficient asset utilization. However, investors should be cautious about the potential short-term liquidity risks suggested by the current ratio. Overall, Comcast seems to be worth considering for further investment analysis.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Comcast (CMCSA)

Company has a positive net income?

Net income is a key measure of a company's profitability, representing the total earnings after expenses. Positive net income indicates a profitable company.

For Comcast (CMCSA), the net income in 2023 stands at $15.388 billion, which is positive. This positivity is a strong indicator for investors, reflecting Comcast's ability to generate profit. Historically, except for the significant dip in 2022 (down to $5.37 billion), Comcast has shown a general upward trend with few fluctuations—most notably achieving over $20 billion in 2017. The high net income in 2023 resumes this positive trajectory and adds confidence to the financial health of the firm.

Company has a positive cash flow?

Evaluating the Cash Flow from Operations (CFO) metric in the Piotroski Analysis is pivotal because it indicates the company's capability to generate cash from its regular business operations. Companies with a positive CFO are generally in a better position to sustain operations, finance debt, and invest for growth.

For the fiscal year 2023, Comcast's Cash Flow from Operations (CFO) stands at $28.501 billion, which is positive. This favorable trend is corroborated by historical data showing a consistent increase in CFO over the past two decades—rising from $2.854 billion in 2003 to the current $28.501 billion. The prolonged positive trend in CFO conveys that Comcast has continually enhanced its ability to generate cash, fortifying its financial stability and operational resilience. Therefore, Comcast earns 1 point for this criterion.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's ability to generate earnings from its assets. It is of particular significance in understanding how efficiently management is at utilizing its assets to generate profits.

Comcast's ROA improved from 0.0201 in 2022 to 0.059 in 2023, adding 1 point to the Piotroski F-Score. This improvement is favorable, indicating better asset utilization. Additionally, examining the data from past two decades, during which the operating cash flow has generally grown consistently, adds more optimistic support to this year's jump in ROA. However, the ROA for Comcast remains markedly lower than the industry median (0.6122 in 2023). Thus, while the trend is positive, Comcast still lags behind the industry standard in profitability efficiency.

Operating Cashflow are higher than Netincome?

One important criterion is that operating cash flow should exceed net income. This can indicate high earnings quality and solid cash management.

For Comcast in 2023, the operating cash flow is $28.5 billion, while the net income is $15.38 billion. This criterion would add 1 point from the Piotroski Score metrics, as the operating cash flow exceeds net income. The trend of operating cash flow surpassing net income is favorable, showing effective cash generation and management. Additionally, examining historical data, Comcast has often exhibited this characteristic more frequently, especially in recent years.

Liquidity of Comcast (CMCSA)

Leverage is declining?

Leverage measures a company's debt level relative to its equity, indicating financial stability.

In 2022, Comcast had a leverage ratio of 0.3819, which decreased to 0.3589 in 2023. This 6.04% decline is a positive trend, suggesting better financial health and risk management. Historically, Comcast's leverage has fluctuated modestly, with a notable jump from 0.3179 in 2017 to 0.4265 in 2018. The current year's improvement earns a point on the Piotroski scale.

Current Ratio is growing?

The Current Ratio measures a company's ability to cover its short-term obligations with its current assets. A rising current ratio is generally viewed as a positive indicator, suggesting improved short-term liquidity.

By examining Comcast’s Current Ratio, which decreased from 0.7827 in 2022 to 0.5967 in 2023, we notice a decline. This marks a decrease in Comcast's ability to cover short-term liabilities using its current assets. Historically, Comcast's Current Ratio has fluctuated, but the most recent number is notably one of the lower entries in the past two decades. Comparing this to the industry median of 0.9574 in 2023, Comcast is significantly underperforming, raising concerns about its short-term liquidity situation. Therefore, this criterion does not add a point to Comcast’s Piotroski score, and the continued low ratio relative to the industry average highlights a potential weakness.

Number of shares not diluted?

Change in shares outstanding allows investors to understand if the company is diluting its shares or engaging in buybacks, impacting the value of their investment.

In reviewing the change in shares outstanding from 2022 (4,220,119,392 shares) to 2023 (3,978,762,306 shares), it's clear there has been a decrease. This reduction is significant, as Comcast bought back approximately 241 million shares over the year. Buybacks are generally seen as a positive indicator, implying the company is confident in its financial position and future prospects. Historically, from 2003 to 2023, Comcast has consistently reduced its outstanding shares from over 10 billion, further emphasizing a trend of share repurchase and shareholder value enhancement. Thus, Comcast earns 1 point in this criterion.

Operating of Comcast (CMCSA)

Cross Margin is growing?

The gross margin criterion measures a company's operational efficiency by analyzing the percentage of revenue that exceeds COGS, highlighting the firm's financial health over time.

The gross margin of Comcast (CMCSA) stands at 0.6976 in 2023, compared to 0.6853 in 2022. This represents an increase which is a positive trend, indicating improved operational efficiency. Comcast's gross margin has risen consistently and outperformed the industry median of 0.6122 for 2023.

Asset Turnover Ratio is growing?

Asset turnover ratio measures a company's efficiency in using its assets to generate sales. Higher ratios indicate better performance.

Comcast's asset turnover ratio has seen an uptick, increasing from 0.4555 in 2022 to 0.4657 in 2023. This positive change suggests improved efficiency in asset utilization. Over the past two decades, the ratio has consistently trended upwards, peaking at 0.4657 this year, from a low of 0.1651 in 2003. Given this persistent growth, the criterion adds 1 point here, marking a favorable trend.