Comcast Corporation (CMCSA) recently teamed up with iControl Networks, which provides software for online home management solutions, to offer home security services to its clients.
The new service is known as Xfinity Home Security service and will be launched in ten different cities across the U.S. To avail this new service, customers have to enter into a contract for a period of three years with Comcast and will be charged $40 per month.
Consumers of this new service will be provided a touch screen device, similar to a tablet, through which they can monitor their home when they are not there. Subscribers can also control their house online through iPad/iPhone applications. They will also get 24 hours police and fire protection along with latest weather, sports and traffic reports.
Comcast has emerged as the largest integrated content development and distribution company in the U.S.after completing the acquisition of NBC Universal. We also remain very much optimistic regarding the company’s diversification, network upgrade and innovative product offering strategies.In the first quarter of 2011, the company posted strong revenue growth and free cash flow. The company’s top and bottom line comfortably beat the Zacks Consensus Estimate.
However, Comcast is facing severe competition from both telecom and satellite service providers that started offering subscription TV services at a lower price. Verizon Wireless (VZ) with its FiOS network and AT&T (T) with its U-Verse network are likely to make the market highly competitive. The recent growth of online video streaming companies such as Netflix Inc. (NFLX) and Hulu have become major threats to the company. Furthermore, the company has a huge debt, which also remains a major concern.
We, thus, maintain our long-term Neutral recommendation for Comcast. Currently, Comcast has a Zacks#3 Rank, implying a short-term Hold rating on the stock.
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