Amid soaring prices, entertainment giants have failed to maintain their peak pandemic-era performances. However, demand for TV entertainment remains strong. Quality TV Entertainment Comcast ( CMCSA ) stock may be worth buying now. However, the weak DISH Network ( DISH ) and WideOpenWest ( WOW ) are best avoided. Continue reading….
The TV entertainment industry suffered greatly amid record high prices, with major entertainment giants failing to maintain their pandemic-era subscription rates. However, watching TV remains the most preferred leisure activity.
According to reports, men spent 3 hours a day watching TV, while women spent 2.70 hours. Demand for daily TV content is strong and should bode well for the TV entertainment industry.
Additionally, investor interest in entertainment stocks is evident from the Invesco Dynamic Leisure and Entertainment ETF’s (Peja) 4.8% gains over the past month. In addition, the global entertainment and media market size is projected to grow at a CAGR of 5.9% from 2022 to 2028.
Given the background, Comcast Corporation (CMCSA) can be a strong addition to your portfolio. However, the fundamentally weak DISH Network Corporation (PETALS) and WideOpenWest, Inc. (WOW) is best avoided now.
Stock to buy:
Comcast Corporation (CMCSA)
CMCSA, America’s largest cable provider to small and medium businesses, operates as a worldwide media and technology company. It operates through Cable Communications; Media; Studio; Theme Parks; and the segments of the sky.
On August 22, 2022, CMCSA launched an additional multi-gig internet speed tier for Xfinity and CMCSA Business customers in Colorado Springs. This launch delivers the fastest upload speed to date and is a landmark addition to CMCSA’s portfolio.
Additionally, on August 1, 2022, CMCSA announced its strategic partnership with Fortinet (FTNT), a global leader in comprehensive, integrated and automated cyber security solutions, to offer enterprises a new suite of secure access service edge (SASE) and security services (SSE) solutions. This collaboration is expected to boost business prospects for both companies.
CMCSA’s revenue totaled $30.02 billion for the second quarter ended June 30, 2022, up 5.1% year over year. It’s arranged EBITDA rose 10.1% year over year to $9.83 billion. Additionally, the company’s adjusted net income reached $4.51 billion, an increase of 14.3% year over year.
Analysts expect CMCSA’s revenue to grow 4.6% year-over-year to $121.72 billion in the current year. Its EPS is estimated to grow 11.1% year-over-year to $3.59 in 2022. It has topped EPS estimates in all four trailing quarters. Shares of CMCSA lost a little intraday to close the last trading session at $37.24.
CMCSA POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR ratings evaluate stocks on 118 different factors, each with its own weight.
CMCSA has a B grade in Stability and Quality. within Entertainment – TV and Internet providers industry, it ranks #1 among nine stocks. Click here to see additional POWR Sentiment, Value, Growth and Momentum ratings for CMCSA.
Stocks to avoid:
DISH Network Corporation (PETALS)
DISH and its affiliates provide pay TV services in the United States. The company operates in two segments, Pay-TV and Wireless. It has approximately 10.71 million pay TV subscribers in the United States, including 8.22 million DISH TV subscribers and 2.49 million SLING TV subscribers.
On July 21, 2022, DISH announced the launch of ViX+ on DISH TV and SLING TV, enabling customers to subscribe to ViX+ directly through its platforms. However, the drop in subscribers may hinder the optimal benefits from this launch. The company’s Sling TV subscribers totaled 2.20 million last quarter, down 9.9% year over year.
DISH’s total revenue was $4.21 billion for the second quarter ended June 30, 2022, down 6.2% year over year. Its net income was down 22.1% year over year to $522.83 million. Additionally, the company’s EPS decreased 22.6% year over year to $0.82.
Analysts expect DISH’s revenue to decline 5.8% year over year to $16.85 billion in the current year. Its EPS is estimated to decline 33% year-over-year to $2.54 in 2022. It has missed EPS estimates in three of the following four quarters. Over the past year, the stock has lost 59.7% to close the last trading session at $17.40.
DISH’s POWR estimates are consistent with this gloomy view. It has an overall rating of D, which equates to a Sell in our rating system. DISH has an F for Quality and a D for Growth. It ranks #8 in the same industry.
We’ve also rated DISH for value, momentum, feel and stability. Get all DISH ratings here.
WideOpenWest, Inc. (WOW)
WOW provides high-speed data, cable television and digital phone services to residential and business customers in the United States. It currently serves approximately 1.90 million homes and businesses and 532,900 customers in the states of Alabama, Florida, Georgia, Michigan, South Carolina and Tennessee.
WOW’s total revenue came in at $176.10 million for the second quarter ended June 30, 2022, down 3.2% year over year. Its telephony segment revenue fell 11.6% year over year to $12.90 million. Also, the company’s video revenue was down 13.7% year-over-year to $47.70 million.
The Street expects WOW’s revenue to decline 31.9% year-over-year to $704.31 million in 2022. It missed consensus EPS estimates in each of the trailing four quarters. Over the past three months, the stock has lost 15.1% to close the last trading session at $18.46.
WOW’s POWR ratings reflect its weak prospects. The stock has an overall rating of D, which equates to a Sell in our POWR Ratings system. WOW also has a D grade for value and feel. It ranks last in the same industry.
Beyond what was said above, we also rated WOW for Quality, Growth, Momentum and Stability. Get all the WOW reviews here.
CMCSA stock was trading at $37.15 per share on Wednesday afternoon, down $0.09 (-0.24%). Year-to-date, CMCSA is down -24.90%, versus a -12.42% gain in the benchmark S&P 500 over the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master’s degree in economics, she helps investors make informed investment decisions through her insightful commentary.
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