ONE LEVEL DEEPER
CMCSA
Warren Buffett frameworkThe Owner-OperatorBenjamin Graham frameworkThe Value ArchitectMichael Mauboussin frameworkThe Expectations EngineerHoward Marks frameworkThe Cycle WhispererPeter Lynch frameworkThe Everyday Edge

Zero revenue growth with margins plunging 480bp to 10.8% - Lynch would classify this slow grower and move on.

cautiousBearishconviction

This framework sees a slow grower masquerading as a stalwart, destroying margins to maintain market share while institutions buy what insiders are selling.

THE LENSES
THE CLASSIFICATIONstagnant

What type of company is this, and what should we expect?

TTM revenue growth at 0% with Q4'25 growth of 3.6% YoY
Operating margins compressed from 15.6% to 10.8% in one year
53.5% of revenue from mature Residential Connectivity segment
Net income declined from $3.7B in Q4'24 to $2.0B in Q4'25

Lynch would classify this as a slow grower trying to act like a stalwart. The 0% TTM growth with deteriorating margins signals a mature business fighting to maintain relevance through aggressive pricing, not the 10-20% steady expansion of a true stalwart.

Revenue
THE GROWTH STORYunclear

Can you explain why this company grows in one sentence?

Residential Connectivity dominates at 53.5% of revenue despite diversification narrative
Revenue mix shows Media at 20.5%, Studios 8.5%, Business Services 7.7%
Geographic concentration with 76.9% domestic US revenue
Operating income fell 37% while revenue grew 3.6% in Q4'25

The growth story is muddled - "cable company that also makes movies and runs theme parks" lacks the clarity Lynch demands. With over half of revenue from residential cable in a cord-cutting world, there's no simple narrative of expansion.

Revenue by Segment
THE PEG RATIObroken

Are we paying a fair price for the growth we're getting?

P/E ratio at 12.9 with earnings declining
EPS fell from $1.08 in Q4'24 to $0.68 in Q4'25
Market implies -13.4% growth rate through reverse DCF
TTM revenue growth at 0% makes PEG calculation meaningless

With zero revenue growth and declining earnings, the PEG ratio breaks down entirely. Lynch would note that even a low P/E of 12.9 is expensive when earnings are shrinking - you're paying for decline, not growth.

P/E Ratio
THE BALANCE SHEET TESTadequate

Can this company survive trouble?

Interest coverage ratio at 3.1x in Q4'25, at 0th percentile historically
Debt-to-equity ratio indicates leveraged capital structure
Generated $8.8B operating cash flow despite margin pressure
Free cash flow of $5.1B quarterly maintains financial flexibility

The balance sheet shows a leveraged mature business - adequate but not fortress-like. While cash generation remains strong, the 0th percentile interest coverage during rising rate environment signals vulnerability Lynch would flag.

Interest Coverage
WHERE IN THE STORYexhausted

Are we early, middle, or late in this growth story?

Operating margins at 10-year low of 10.8%
Revenue growth decelerated from historical mid-single digits to 0% TTM
Core cable business facing structural headwinds from streaming
Free cash flow yield at decade-high 5.0% suggests market sees no growth

This framework sees late innings clearly - margins collapsing, growth gone, and the market pricing in decline. The core cable story that built this company is ending, and no new narrative has emerged to replace it.

Operating Margin
KEY NUMBERS
VERDICT

Applying Lynch's framework reveals a slow grower in decline, not the stalwart it pretends to be. With zero revenue growth, collapsing margins, unclear narrative, and insiders selling while institutions accumulate, this lacks everything Lynch seeks - no growth story, no reasonable price for that growth, and no edge for individual investors. The framework suggests looking elsewhere for the next 10-bagger. Why own a cable company priced for decline when you could own a fast grower priced for growth?

This analysis applies Peter Lynch's published investment framework to publicly available financial data. It is not authored by, endorsed by, or affiliated with Peter Lynch. Educational purposes only. Not financial advice.

OTHER PERSPECTIVES
Howard Marks framework
The Cycle Whisperer
Bullish
Benjamin Graham framework
The Value Architect
Leaning Bullish
Michael Mauboussin framework
The Expectations Engineer
Neutral
Warren Buffett framework
The Owner-Operator
Leaning Bearish
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