WBD Should I Buy
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Warner Bros. Discovery Inc. (WBD) is not a strong buy at this moment for a beginner investor with a long-term strategy. The stock is facing significant uncertainty due to regulatory risks surrounding its merger with Paramount Skydance, weak financial performance, and insider selling activity. While the merger approval could provide future upside, the lack of immediate positive trading signals and the cautious sentiment from analysts and Congress suggest holding off on investment for now.
The MACD is negative and expanding, indicating bearish momentum. RSI is neutral at 22.628, and moving averages are converging, showing no clear trend. Key support is at $26.844, and resistance is at $27.534. The stock is trading below its pivot point, suggesting potential downside risk.
Shareholders have approved the merger with Paramount Skydance, which could enhance content production capabilities and create a stronger competitor in the media industry. Gross margin increased by 3.73% YoY in Q4 2025, showing some operational improvement.
Regulatory risks loom over the merger, with the California Attorney General investigating the deal. Insiders have significantly increased selling activity (up 24,741.29% in the last month), indicating lack of confidence. Congress members have also sold shares recently. Financials show declining revenue (-5.65% YoY), net income (-48.99% YoY), and EPS (-50.00% YoY).
In Q4 2025, revenue dropped to $9.46 billion (-5.65% YoY), net income fell to -$252 million (-48.99% YoY), and EPS declined to -$0.10 (-50.00% YoY). However, gross margin improved to 31.99% (+3.73% YoY), signaling some cost control improvements.
Analysts are largely neutral or bearish on WBD. Recent downgrades include Neutral and Hold ratings from MoffettNathanson, Deutsche Bank, and others, citing limited upside potential and regulatory risks. The average price target is around $31, offering limited upside from the current pre-market price of $26.93.
