Spin-Off Research Values Comcast SOTP At $40 -BUY

Comcast reported 3Q25 revenue declined 2.7% to $31.2 billion, primarily due to a prior-year Olympics comparison, with adjusted EBITDA and EPS flat. The company is undergoing a strategic pivot in its Connectivity & Platforms segment, investing in a new go-to-market strategy that led to 104,000 broadband customer losses and anticipated near-term ARPU pressure, despite strong mobile line additions and wireless revenue growth. Concurrently, Theme Parks revenue surged 18.7% driven by Epic Universe, and Peacock's EBITDA losses were nearly halved. Comcast is also proceeding with the tax-free spin-off of Versant Media Group by year-end 2025, which will house cable networks and digital platforms facing linear TV declines but aiming to leverage digital assets and live content. Analysts maintain a BUY rating on Comcast, with a sum-of-the-parts valuation of $39.80 per share for the consolidated entity.

Analysis

Comcast (CMCSA) reported 3Q25 results with a 2.7% YoY revenue decline to $31.2 billion, primarily due to a $1.9 billion prior-year benefit from the Paris Olympics, while adjusted EBITDA and EPS remained nearly flat. This was partially offset by robust growth in Theme Parks, up 18.7% YoY driven by Epic Universe, and a 14.0% increase in domestic wireless revenue from 414,000 new lines. Peacock's adjusted EBITDA losses also improved significantly, nearly halving to $217.0 million.

The Connectivity & Platforms segment experienced a 0.6% revenue decline and a 3.5% adjusted EBITDA decrease, reflecting planned investments in a new go-to-market strategy. This pivot led to a net loss of 104,000 domestic broadband customers and is expected to cause continued EBITDA pressure and ARPU dilution into early 2026 due to simplified pricing and no planned rate increases. Mobile additions, however, reached a record 414,000 lines, offsetting some broadband challenges.

Concurrently, Comcast is proceeding with the tax-free spin-off of Versant Media Group (VSNT) by year-end 2025, which will house cable networks facing structural declines in linear TV but aims to monetize digital assets. Analysts maintain a BUY rating on CMCSA, with a sum-of-the-parts valuation of $39.80 per share, recognizing the stub's strong core broadband, studio, theme parks, and Peacock potential despite near-term headwinds.

Key Decisions for Investors

• Monitor the execution and financial impact of Comcast's new broadband go-to-market strategy, particularly ARPU trends and subscriber stabilization, given management's guidance for continued near-term pressure.
• Evaluate the implications of the Versant spin-off, considering the structural headwinds for linear TV versus the potential for digital asset monetization and the tax-free nature of the transaction for existing shareholders.
• Assess the growth trajectory of high-margin segments like Theme Parks (post-Epic Universe) and Mobile, and Peacock's path to profitability, as these are critical for long-term value creation amidst broadband competition.