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Walt Disney Stock Sparkles on Disney+ Subscriber Growth

GuruFocus.com
·2 min read

- By James Li

On Thursday, shares of The Walt Disney Co. (NYSE:DIS) soared as much as 6% in aftermarket trading on the heels of reporting a loss per share that was less drastic than analysts feared, driven by subscription growth that outshined management's expectations.

For the three months ending Oct. 3, the Burbank, California-based entertainment giant reported a net loss of 20 cents per share excluding items affecting comparability, which was better than the expected net loss of 71 cents per share according to Refinitiv estimates.


Walt Disney Stock Sparkles on Disney+ Subscriber Growth
Walt Disney Stock Sparkles on Disney+ Subscriber Growth

Company smashes Disney+ subscription estimates in first year since launch

Disney CEO Bob Chapek said that the company was still able to bolster the company's long-term growth prospects even though the coronavirus pandemic disrupted the parks and resorts businesses. The direct-to-consumer business offset the setback, with Disney+ paid subscriptions totaling over 73 million during the first year since its launch.

Walt Disney Stock Sparkles on Disney+ Subscriber Growth
Walt Disney Stock Sparkles on Disney+ Subscriber Growth

The strong subscriber growth contributed to a 41% increase in revenue for Disney's direct-to-consumer and international business segments, offsetting sharp revenue declines in the parks, experiences & products and studio entertainment businesses.

Stock rises as net loss comes in better than expected

Shares of Walt Disney traded at an aftermarket high of $143.93, up 6.2% from the closing price of $135.52. The stock is modestly overvalued based on its price-to-GF Value ratio of 1.27.

Walt Disney Stock Sparkles on Disney+ Subscriber Growth
Walt Disney Stock Sparkles on Disney+ Subscriber Growth

GuruFocus ranks the company's profitability 8 out of 10, driven on a 4.5-star business predictability rank and an operating margin that outperforms 73.39% of global competitors.

Walt Disney Stock Sparkles on Disney+ Subscriber Growth
Walt Disney Stock Sparkles on Disney+ Subscriber Growth

Gurus with large holdings in Disney include Ken Fisher (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Daniel Loeb (Trades, Portfolio) and PRIMECAP Management (Trades, Portfolio).

Walt Disney Stock Sparkles on Disney+ Subscriber Growth
Walt Disney Stock Sparkles on Disney+ Subscriber Growth

Disclosure: No positions.

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This article first appeared on GuruFocus.