Should you buy Disney stock (Feb 2023)
- 5 months ago
For more detailed investing ideas visit: https://www.overlookedalpha.com
Despite an aggressive push into streaming, a recent price hike has cost the company subscribers.
As of last quarter, total number of Disney Plus subscribers had fallen 1% to 161.8 million and the segment posted a 1-billion-dollar loss.
Meanwhile, linear networks, saw a 16% decrease in profits to 1.26 billion.
That decline is not surprising as consumers turn to online streaming services and under returning CEO Bob Iger, Disney plans to “transform its business” by reducing costs, cutting jobs and restructuring its business model.
Right now, the company is valued around 3 times revenue or 21 times EBITDA. That multiple would be acceptable if Disney’s streaming service was showing growth. Even at break even it would add an extra billion dollars to bottom line earnings.
However, the online streaming industry, is fiercely competitive and the high cost of content means it may not be as profitable as once thought.
Overall, Disney is a quality brand and an attractive opportunity at the right price. But the price right now isn’t low enough. That’s why I give the stock a neutral rating.
But these are my personal opinions not financial advice and I do own a small amount of Disney stock. For more detailed investing ideas visit our website overlookedalpha.com
Despite an aggressive push into streaming, a recent price hike has cost the company subscribers.
As of last quarter, total number of Disney Plus subscribers had fallen 1% to 161.8 million and the segment posted a 1-billion-dollar loss.
Meanwhile, linear networks, saw a 16% decrease in profits to 1.26 billion.
That decline is not surprising as consumers turn to online streaming services and under returning CEO Bob Iger, Disney plans to “transform its business” by reducing costs, cutting jobs and restructuring its business model.
Right now, the company is valued around 3 times revenue or 21 times EBITDA. That multiple would be acceptable if Disney’s streaming service was showing growth. Even at break even it would add an extra billion dollars to bottom line earnings.
However, the online streaming industry, is fiercely competitive and the high cost of content means it may not be as profitable as once thought.
Overall, Disney is a quality brand and an attractive opportunity at the right price. But the price right now isn’t low enough. That’s why I give the stock a neutral rating.
But these are my personal opinions not financial advice and I do own a small amount of Disney stock. For more detailed investing ideas visit our website overlookedalpha.com