Walt Disney Co (DIS) Stock Analysis and Metrics

Sector: Communication Services Industry: Entertainment CIK: 0001744489

Market Cap 204.13 Bn

P/B 1.86

P/E 16.46

P/S 2.16

ROIC (Qtr) 5.88

Div Yield % 1.55

Rev 1y % (Qtr) -0.49

Total Debt (Qtr) 42.03 Bn

Debt/Equity (Qtr) 0.38

About

The Walt Disney Company, commonly known as Disney, is a prominent player in the global entertainment industry, with its ticker symbol being DIS. The company's operations span across three segments: Entertainment, Sports, and Experiences. Disney's main business activities encompass the production and distribution of films, television shows, and digital content, as well as the operation of theme parks and resorts around the world. Disney's operations are spread across various business activities and countries. The company is involved in the production...

The Walt Disney Company, commonly known as Disney, is a prominent player in the global entertainment industry, with its ticker symbol being DIS. The company's operations span across three segments: Entertainment, Sports, and Experiences. Disney's main business activities encompass the production and distribution of films, television shows, and digital content, as well as the operation of theme parks and resorts around the world.

Disney's operations are spread across various business activities and countries. The company is involved in the production and distribution of films, television shows, and digital content, and it operates theme parks and resorts in different parts of the world. Additionally, Disney has a significant presence in the sports industry, with the production and distribution of sports programming, including ESPN, NFL, and MLB, as well as the operation of sports-themed resorts and hotels.

The company's revenue is generated through various primary products, services, and customer bases. In the Entertainment segment, Disney's primary products and services include Disney+, Disney+ Hotstar, Hulu, ESPN+, and National Geographic. These services are offered to a diverse customer base, including children, families, and adults who are fans of the company's brands and content. The Sports segment's primary products and services include affiliate fees, advertising, subscription fees, and other revenue streams. The Experiences segment's primary products and services include theme park admissions, resorts and vacations, parks and experiences merchandise, food and beverage, and other revenue streams.

Disney's position within the industry is solid, with a long history of producing high-quality content and a strong brand reputation. The company is a major player in the streaming market, with its Disney+ service being one of the most popular streaming services in the world. Disney's competitors include other major entertainment companies such as Comcast, AT&T, and ViacomCBS. The company's competitive advantages include its strong brand reputation, a large library of content that is highly regarded by audiences around the world, and a significant presence in the global market.

The Walt Disney Company has a diverse and large customer base, with products and services available in many different languages and distributed through various channels, including cable and satellite television, streaming services, and physical media. The company's brands and content are highly regarded by audiences around the world, and it has a strong brand reputation and a significant presence in the global market.

Disney's primary products and services include Disney+, Disney+ Hotstar, Hulu, ESPN+, and National Geographic in the Entertainment segment. In the Sports segment, the company's primary products and services include affiliate fees, advertising, subscription fees, and other revenue streams. In the Experiences segment, the company's primary products and services include theme park admissions, resorts and vacations, parks and experiences merchandise, food and beverage, and other revenue streams. These products and services are offered under the trade names of Disney+, Disney+ Hotstar, Hulu, ESPN+, and National Geographic.

Price action

Investment thesis

Bull case

Strong operating cash flow of 18.10B provides robust 0.43x coverage of total debt 42.03B, indicating excellent debt servicing capability and financial flexibility.
Operating cash flow of 18.10B provides exceptional 17.63x coverage of minority interest expenses 1.03B, showing strong core operations.
Operating cash flow of 18.10B provides strong 13.28x coverage of stock compensation 1.36B, indicating sustainable incentive practices.
Operating cash flow of 18.10B provides exceptional 13.87x coverage of interest expenses 1.30B, showing strong debt service capability.
Tangible assets of 83.62B provide exceptional 13.38x coverage of deferred revenue 6.25B, showing strong service capability backing.

Bear case

Operating cash flow of 18.10B barely covers its investment activities of (8.04B), with a coverage ratio of -2.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 18.10B provides thin coverage of dividend payments of (1.80B) with a -10.04 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
High receivables of 13.22B relative to inventory of 2.13B (6.19 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
Operating cash flow of 18.10B provides minimal -12.68x coverage of tax expenses of (1.43B), suggesting potential tax planning inefficiencies or unsustainable tax positions.
Operating earnings of 12.28B show weak coverage of depreciation charges of 5.33B, with a 2.31 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Entertainment

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NFLX	Netflix Inc	398.09 Bn	38.16	9.18	14.46 Bn
2	DIS	Walt Disney Co	204.13 Bn	16.46	2.16	42.03 Bn
3	WBD	Warner Bros. Discovery, Inc.	70.69 Bn	145.75	1.87	33.52 Bn
4	FWONA	Liberty Media Corp	53.12 Bn	-399.43	13.15	7.04 Bn
5	LYV	Live Nation Entertainment, Inc.	33.40 Bn	103.67	1.36	9.39 Bn
6	FOXA	Fox Corp	33.26 Bn	16.34	2.02	6.60 Bn
7	PSKY	Paramount Skydance Corp	18.94 Bn	-1,353.00	0.66	14.73 Bn
8	TKO	TKO Group Holdings, Inc.	17.56 Bn	76.76	4.05	4.04 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	1.22	1.53
EV to Cash from Ops. EV/CFO	13.32	25.10
EV to Debt EV to Debt	5.74	5.03
EV to EBIT EV/EBIT	19.63	165.24
EV to EBITDA EV/EBITDA	13.14	-156.71
EV to Free Cash Flow [EV/FCF] EV/FCF	23.92	72.07
EV to Market Cap EV to Market Cap	1.18	2.12
EV to Revenue EV/Rev	2.55	6.42
Price to Book Value [P/B] P/B	1.86	2.40
Price to Earnings [P/E] P/E	16.46	-114.33

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	6.88	1.03
Dividend Payout Ratio % Div Payout % (Qtr)	14.50	-17.28
Dividend per Basic Share Div per Share (Qtr)	1.00	0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	17.90	7.73
Interest Coverage Int. cover (Qtr)	9.41	-38.17

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	-48.26	-33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	-5.11	248.04
Dividend Growth (1y) % Div 1y % (Qtr)	33.33	0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	135.33	-100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	37.79	-28.24
EBIT Growth (1y) % EBIT 1y % (Qtr)	52.98	-85.91
EBT Growth (1y) % EBT 1y % (Qtr)	62.17	24.10
EPS Growth (1y) % EPS 1y % (Qtr)	152.94	18.31
FCF Growth (1y) % FCF 1y % (Qtr)	17.74	118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	9.17	30.85

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	0.48	0.60
Cash Payout Ratio Cash Payout (Qtr)	0.07	0.04
Cash Ratio Cash Ratio (Qtr)	0.17	0.45
Current Ratio Curr Ratio (Qtr)	0.71	1.09
Debt to Equity Ratio Debt/Equity (Qtr)	0.38	1.01
Interest Cover Ratio Int Coverage (Qtr)	9.41	-38.17
Times Interest Earned Times Interest Earned (Qtr)	9.41	-38.17

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	18.60	-65.26
EBIT Margin % EBIT Margin % (Qtr)	13.01	-79.53
EBT Margin % EBT Margin % (Qtr)	11.62	-82.47
Gross Margin % Gross Margin % (Qtr)	37.80	35.56
Net Profit Margin % Net Margin % (Qtr)	13.10	-83.18

Walt Disney Co (NYSE: DIS)

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