It’s been a bumpy ride for Comcast (NASDAQ:CMSA) stock over the past few years. The communications giant has been struggling against industry headwinds, as well as a reputation for terrible customer service.

But the light at the end of the tunnel might be closer than anticipated for the owners of Comcast stock. CMCSA is due to report its first-quarter earnings before the bell tomorrow, and investors will be expecting updates on the firm’s future growth plans. Here’s a look at what to watch when CMCSA releases its Q1 results.

Expectations Are High

CMCSA is widely expected to deliver positive Q1 results. The firm turned in impressive fourth-quarter results, and many are hoping to see more of the same this time around. Analysts on average expect the company to report EPS of 66 cents on revenue of $27.31 billion.

If the firm can deliver on those expectations, its revenue will have risen nearly 20% year-over-year. At this point, those high expectations are priced into CMCSA stock,  but if CMCSA is able to go above and beyond what the market has been expecting, Comcast stock could rise meaningfully. On the flip side, the high expectations make CMCSA stock dangerous right now because any misstep by the company would have disastrous consequences for Comcast stock.

Xfinity Flex

Perhaps the most important component of the bull case on CMCSA stock is the company’s Xfinity Flex streaming service. The $5-per-month service caters to cord-cutting households that no longer want to pay for cable subscriptions. Comcast has launched the service as an add-on for its internet-only customers. Aside from consolidating existing services in one place and enabling them to be controlled by voice commands, Flex also has a library of free content as well as on-demand movie and TV offerings. 

Comcast is hoping that, by making its Flex service multifaceted, the firm will encourage its customers to use more of its offerings.

The service was rolled out at the end of March, so it won’t have any impact on the firm’s Q1 financial results. Management will likely give an update on how the Flex program has been received among CMCSA’s customers so far. Investors will also be keen to hear an update on the free ad-supported content that Flex provides, as well as the company’s future plans for the service.

The Sky’s the Limit

Another factor that has been drawing investors to CMCSA stock recently is the company’s acquisition of British broadcasting firm Sky TV. Last quarter, Comcast revealed pro-forma results showing that Sky had generated $5 billion of revenue in Q4. But the bigger benefit that Sky brings to the table is access to Europe. 

Sky has 27 million European subscribers and is known for creating quality content that users are hooked on. It also has a lot of growth potential; its CEO Jeremy Darroch, said it has only penetrated about 34% of the addressable market so far.

Investors will be looking for Sky’s revenue to grow. They will also be interested in hearing management’s plans for generating growth in Europe and integrating Sky’s content into Comcast’s subscription offerings.

Universal Studios

Part of the reason for Comcast’s impressive Q4 results was Universal Studios, whose Q4 top line came in at $3.3 billion. The Jurassic Park and Harry Potter franchises are both under the Universal Studios umbrella and the two have huge fan bases. As of now, there are no plans to include Universal content in Comcast’s Xfinity Flex plan, but Universal itself is expected to announce its own streaming service at some point in 2020.

Investors will be expecting another big quarter from Universal, and it will be in focus as the owners of Comcast stock look for clues about its streaming service. 

The Bottom Line on Comcast Stock

CMCSA looks like a winner this earnings season. It appears to be back on firm footing after a few shaky years. At this point, I can’t see Flex gaining the kind of traction that Comcast is hoping for, but the Universal streaming bundle and Sky have a lot of promise. With that in mind, CMCSA stock looks like a strong pick in the telecom sector. If the firm’s earnings meet expectations, Comcast stock could climb above its current levels.

As of this writing Laura Hoy did not hold a position in any of the aforementioned securities.