Media conglomerate Comcast (NASDAQ:CMCSA) is set to report fourth-quarter earnings before the bell on Wednesday, January 23. The numbers should be pretty good. Comcast has a long history of beating both earnings and revenue estimates. There’s no reason to believe the Q4 report will yield different results. As such, a double-beat quarter is likely on the horizon for Comcast stock.

But, that isn’t anything to write home about. As stated before, Comcast has a history of beating Street estimates. But over the past several years as Comcast has consistently topped Wall Street’s quarterly EPS estimates, Comcast stock has dramatically under-performed the market.

Why? Because secular trends haven’t been in favor of Comcast stock. Namely, cord cutting has weighed on the company’s operations, and ideas of an entirely wireless future have forced investors to question the long-term sustainability of Comcast’s business model. As such, regardless of multiple consecutive double-beat quarters, Comcast stock has struggled relative to the market.

That may all be changing.

The secular trends underlying Comcast stock are starting to improve. Specifically, the company is starting to pivot to align itself with the secular streaming trend. As it does, underlying sentiment will improve. Questions regarding long-term sustainability will disappear. And Comcast stock will head materially higher.

Q4 Earnings Aren’t Super Important

As mentioned earlier, Comcast has a history of beating both Street EPS and revenue estimates. This streak of EPS beats started in April 2016. Since then, Comcast stock has risen just 15%, versus a near 30% gain for the S&P 500. Meanwhile, both CMCSA stock and the S&P 500 have ~2% dividend yields, so Comcast’s total return is also well below the market’s total return.

How is this possible? Why does a company which consistently tops estimates have a stock that is dramatically under-performing the market?

Secular headwinds. Although Comcast has been beating estimates, those beats have been largely ignored by investors, who are taking a more long-term bearish stance on Comcast stock. Investors are concerned that, with the cord cutting trend picking up and Comcast doing very little to energize or pivot its entertainment business in the face of this headwind, Comcast’s business model does not have long term staying power.

These concerns will persist so long as the underlying trends remain bearish. As such, quarterly earnings reports aren’t super important for this stock. Instead, what really matters are the underlying trends.

The Focus Will Be on Improving Secular Trends

Comcast is essentially two really big businesses. There’s the telecom business, which is being boosted by internet connectivity growth but being hurt by cord cutting. CMCSA also owns NBCUniversal, which is being boosted by strong content but is also being hurt by cord cutting and declining TV ad rates.

But now, there’s reason to believe that the worst of the cord cutting headwinds which have plagued both businesses is in the rearview mirror.

On the telecom side, robust internet connectivity growth is already more than offsetting video subscriber losses. Going forward, Comcast will be able to charge more for high-speed Internet as the service becomes faster, more robust, and more complex, with more applications given growth in the IoT market. This is already happening. Internet service prices have risen over the past several years. As they have, margins have gone up. This trend will continue for the foreseeable future, so the telecom business should be boosted by stable growth and stable margin expansion.

Regarding NBCUniversal, all that really matters is content. NBCUniversal has strong content, trailing only Disney (NYSE:DIS) and Netflix (NASDAQ:NFLX) in that area. Demand for its content isn’t wavering, nor will it waver anytime soon. Instead, the company has just struggled with content distribution as they’ve been slow to pivot to the streaming market. But, this pivot is happening now, and as the company embraces streaming over the next several quarters, the NBCUniversal business should benefit from an operational and sentiment boost.

CMCSA Valuation Is Attractive and Defensive

A sentiment boost could translate into big gains for Comcast stock due to the currently depressed valuation.

Across the board, CMCSA stock trades at a big discount to its historically “normal” valuation. Over the past five years, the average valuation on this stock has been 16x forward earnings, 2.1x trailing sales, 2.7x book value, and 9x cash flow. Today, the stock trades at 13x forward earnings, 1.9x trailing sales, 2.3x book value, and 7x cash flow. Moreover, the dividend yield is 2.1% today, versus a five-year average yield of 1.6%.

In other words, Comcast stock is really cheap. If sentiment improves, that will translate into a reversion in this stock’s valuation. A reversion in the forward P/E multiple to “normal” levels implies more than 20% upside through multiple expansion alone.

Bottom Line on CMCSA Stock

There’s a lot to like about Comcast stock heading into earnings. You have a healthy growth company with a big moat, improving underlying trends, a history of earnings beats, and a stock that is trading at a big discount to its “normal” valuation. That combination implies nice upside so long as the underlying trends continue to move in a favorable direction for the company.

As of this writing, Luke Lango was long NFLX and DIS.