Disney's Streaming Business Transformation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 10 hours ago
0mins
Should l Buy DIS?
Source: Yahoo Finance
- Streaming User Growth: By the end of fiscal year 2025, Disney's combined subscriber base for Disney+ and Hulu reached approximately 196 million, indicating success in the streaming sector, although overall profitability still requires improvement.
- Profitability Improvement: In the first quarter of fiscal year 2026, Disney's streaming business generated $1.3 billion in operating income, reflecting a gradual maturation of its profit model, yet it remains secondary to other revenue sources.
- Strong Experiences Business: In the first quarter of fiscal year 2026, Disney's Experiences segment, which includes theme parks and cruise lines, contributed $3.3 billion in operating income, accounting for 38.5% of total revenue and 71.9% of operating income, making it the company's
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Analyst Views on DIS
Wall Street analysts forecast DIS stock price to rise
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 96.560
Low
123.00
Averages
137.29
High
152.00
Current: 96.560
Low
123.00
Averages
137.29
High
152.00
About DIS
The Walt Disney Company is a diversified worldwide entertainment company. The Company's segments include Entertainment, Sports and Experiences. The Entertainment segment generally encompasses its non-sports focused global film and episodic content production and distribution activities. The lines of business within the Entertainment segment along with their business activities include Linear Networks, Direct-to-Consumer, and Content Sales/Licensing. The Sports segment encompasses its sports-focused global television and direct-to-consumer (DTC) video streaming content production and distribution activities. The lines of business within the Sports segment include ESPN and Star. The Experiences segment includes Parks and Experiences and Consumer Products. Parks and Experiences consists of Walt Disney World Resort in Florida, Disneyland Resort in California, Disney Cruise Line, and others. Consumer Products includes licensing of its trade names, characters, visual, literary and other IP.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Disney's New CEO Signals Strategic Shift
- Streaming Success: Disney ended fiscal year 2025 with approximately 196 million subscribers across Disney+ and Hulu, achieving $1.3 billion in operating income last year, which underscores its leadership in the streaming market.
- Strong Experiences Segment: In Q1 of fiscal year 2026, Disney's Experiences segment, which includes theme parks and cruise lines, generated $3.3 billion in operating income, accounting for 38.5% of total revenue and contributing 71.9% of operating income, making it the company's most significant profit source.
- Strategic Investment Plans: New CEO Josh D'Amaro announced plans in 2023 to invest $60 billion over the next decade to expand theme parks and to double the cruise line fleet by 2031, reflecting a strong focus on core business strengths.
- Improved Financial Position: Disney has reduced its leverage to 2.3x EBITDA and reinstated its dividend, with the stock now trading at less than 15 times its 2026 earnings estimates, while analysts project annual earnings growth of 11% to 12% over the next three to five years.
See More
Writers Guild and Major Studios Reach Provisional Agreement
- Agreement Reached: The Writers Guild and major entertainment companies have reached a provisional agreement for a four-year contract, slightly longer than previous ones, aimed at preventing another industry-wide disruption, reflecting a swift and efficient negotiation process.
- Health Plan Stabilization: A key element of the agreement focuses on stabilizing the guild's health plan, which has faced financial strain in recent years, with increased contributions from studios and streamers expected to enhance the fund's sustainability.
- Industry Pressure Reflection: The quick conclusion of negotiations indicates both sides' desire to avoid another costly shutdown, especially as the industry grapples with layoffs and reduced streaming investments, showcasing a willingness to collaborate.
- Future Negotiation Preparations: While details of the writers' agreement remain undisclosed, the early resolution suggests that both labor and management are prioritizing predictability after a turbulent period, setting the stage for upcoming negotiations with directors and actors.
See More
The Super Mario Galaxy Movie Dominates Box Office with Strong Opening
- Box Office Performance: According to Comscore estimates, The Super Mario Galaxy Movie achieved approximately $130.9 million in its opening weekend, becoming the top film in both the U.S. and globally, although slightly down from last year's comparable frame, year-to-date revenue remains significantly higher.
- Global Revenue: The film performed strongly in international markets, surpassing $300 million in worldwide box office during its opening stretch, indicating the ongoing popularity of family and video game adaptations, further solidifying its market position.
- Other Films' Performance: Amazon MGM's Project Hail Mary held the No. 2 position in its third weekend with $30.7 million, bringing its domestic total to over $217 million, showcasing the strong performance of sci-fi films.
- Market Dynamics: Despite the strong debut of The Super Mario Galaxy Movie, overall weekend revenue dipped slightly year-over-year, reflecting a limited release slate outside of major tentpoles, yet the box office for 2026 remains significantly up compared to last year, indicating continued recovery momentum for theaters.
See More
Netflix Raises Prices Again, Revealing Growth Potential
- Membership Growth and Pricing: Netflix anticipates revenue growth driven by membership increases and price hikes in 2026, recently raising U.S. prices by $1 to $2 per month, indicating strong pricing power and the potential for continued double-digit sales growth.
- Subscriber Metrics: By the end of 2024, Netflix boasts nearly 90 million subscribers in the U.S. and Canada, significantly outpacing competitors Disney and Warner Bros., which have around 60 million subscribers, underscoring its dominance in the streaming market.
- Viewing Hours: The average U.S. subscriber spends over one hour daily on Netflix, compared to Hulu's 36 minutes, highlighting Netflix's superior engagement and customer satisfaction, which bolsters management's confidence in raising prices.
- Advertising Revenue Growth: Despite competitive pricing, Netflix's ad-supported tier remains lower than rivals, with management expecting to double ad revenue this year, suggesting a long runway for growth and the ability to raise prices more frequently to achieve necessary double-digit growth.
See More
Netflix Raises Prices Again, Sustains Growth Momentum
- Price Adjustment: Netflix has raised its monthly fees for U.S. subscribers by $1 to $2, demonstrating its strong pricing power, which is expected to drive revenue growth necessary to maintain its valuation.
- User Growth: By the end of 2024, Netflix had nearly 90 million subscribers in the U.S. and Canada, significantly surpassing competitors Disney+ and Hulu, which reported 60 million subscribers, highlighting its market leadership.
- Viewing Time Advantage: The average U.S. subscriber spends over one hour per day on Netflix, compared to Hulu's 36 minutes, indicating a significant edge in user engagement and satisfaction, which supports its pricing strategy.
- Advertising Revenue Potential: Management expects to double its ad revenue this year, and with high user engagement, Netflix is positioned to raise prices more frequently in the future, achieving the double-digit growth needed to justify its 30x earnings multiple.
See More
Disney's New CEO to Drive Business Recovery
- New CEO Background: Josh D’Amaro, the new CEO, comes from Disney's Experiences segment, which is the company's cash cow, and is expected to bring a new strategic focus and leadership to the company.
- Improved Financials: Disney reported $3.3 billion in operating income in Q1 2026, accounting for 38.5% of total revenue, indicating strong performance from the Experiences segment that is likely to drive overall financial recovery.
- Expansion Investment Plans: D’Amaro announced a $60 billion investment over the next decade to expand theme parks and plans to double the cruise line fleet by 2031, further solidifying the company's market position.
- Attractive Valuation: Disney's stock trades at less than 15 times its 2026 earnings estimates, combined with an expected annual earnings growth of 11% to 12%, showcasing strong investment appeal despite a mere 6% stock price increase over the past decade.
See More
Disney's New CEO Signals Strategic Shift
- Streaming Success: Disney ended fiscal year 2025 with approximately 196 million subscribers across Disney+ and Hulu, achieving $1.3 billion in operating income last year, which underscores its leadership in the streaming market.
- Strong Experiences Segment: In Q1 of fiscal year 2026, Disney's Experiences segment, which includes theme parks and cruise lines, generated $3.3 billion in operating income, accounting for 38.5% of total revenue and contributing 71.9% of operating income, making it the company's most significant profit source.
- Strategic Investment Plans: New CEO Josh D'Amaro announced plans in 2023 to invest $60 billion over the next decade to expand theme parks and to double the cruise line fleet by 2031, reflecting a strong focus on core business strengths.
- Improved Financial Position: Disney has reduced its leverage to 2.3x EBITDA and reinstated its dividend, with the stock now trading at less than 15 times its 2026 earnings estimates, while analysts project annual earnings growth of 11% to 12% over the next three to five years.
See More
Writers Guild and Major Studios Reach Provisional Agreement
- Agreement Reached: The Writers Guild and major entertainment companies have reached a provisional agreement for a four-year contract, slightly longer than previous ones, aimed at preventing another industry-wide disruption, reflecting a swift and efficient negotiation process.
- Health Plan Stabilization: A key element of the agreement focuses on stabilizing the guild's health plan, which has faced financial strain in recent years, with increased contributions from studios and streamers expected to enhance the fund's sustainability.
- Industry Pressure Reflection: The quick conclusion of negotiations indicates both sides' desire to avoid another costly shutdown, especially as the industry grapples with layoffs and reduced streaming investments, showcasing a willingness to collaborate.
- Future Negotiation Preparations: While details of the writers' agreement remain undisclosed, the early resolution suggests that both labor and management are prioritizing predictability after a turbulent period, setting the stage for upcoming negotiations with directors and actors.
See More
The Super Mario Galaxy Movie Dominates Box Office with Strong Opening
- Box Office Performance: According to Comscore estimates, The Super Mario Galaxy Movie achieved approximately $130.9 million in its opening weekend, becoming the top film in both the U.S. and globally, although slightly down from last year's comparable frame, year-to-date revenue remains significantly higher.
- Global Revenue: The film performed strongly in international markets, surpassing $300 million in worldwide box office during its opening stretch, indicating the ongoing popularity of family and video game adaptations, further solidifying its market position.
- Other Films' Performance: Amazon MGM's Project Hail Mary held the No. 2 position in its third weekend with $30.7 million, bringing its domestic total to over $217 million, showcasing the strong performance of sci-fi films.
- Market Dynamics: Despite the strong debut of The Super Mario Galaxy Movie, overall weekend revenue dipped slightly year-over-year, reflecting a limited release slate outside of major tentpoles, yet the box office for 2026 remains significantly up compared to last year, indicating continued recovery momentum for theaters.
See More
Netflix Raises Prices Again, Revealing Growth Potential
- Membership Growth and Pricing: Netflix anticipates revenue growth driven by membership increases and price hikes in 2026, recently raising U.S. prices by $1 to $2 per month, indicating strong pricing power and the potential for continued double-digit sales growth.
- Subscriber Metrics: By the end of 2024, Netflix boasts nearly 90 million subscribers in the U.S. and Canada, significantly outpacing competitors Disney and Warner Bros., which have around 60 million subscribers, underscoring its dominance in the streaming market.
- Viewing Hours: The average U.S. subscriber spends over one hour daily on Netflix, compared to Hulu's 36 minutes, highlighting Netflix's superior engagement and customer satisfaction, which bolsters management's confidence in raising prices.
- Advertising Revenue Growth: Despite competitive pricing, Netflix's ad-supported tier remains lower than rivals, with management expecting to double ad revenue this year, suggesting a long runway for growth and the ability to raise prices more frequently to achieve necessary double-digit growth.
See More
Netflix Raises Prices Again, Sustains Growth Momentum
- Price Adjustment: Netflix has raised its monthly fees for U.S. subscribers by $1 to $2, demonstrating its strong pricing power, which is expected to drive revenue growth necessary to maintain its valuation.
- User Growth: By the end of 2024, Netflix had nearly 90 million subscribers in the U.S. and Canada, significantly surpassing competitors Disney+ and Hulu, which reported 60 million subscribers, highlighting its market leadership.
- Viewing Time Advantage: The average U.S. subscriber spends over one hour per day on Netflix, compared to Hulu's 36 minutes, indicating a significant edge in user engagement and satisfaction, which supports its pricing strategy.
- Advertising Revenue Potential: Management expects to double its ad revenue this year, and with high user engagement, Netflix is positioned to raise prices more frequently in the future, achieving the double-digit growth needed to justify its 30x earnings multiple.
See More
Disney's New CEO to Drive Business Recovery
- New CEO Background: Josh D’Amaro, the new CEO, comes from Disney's Experiences segment, which is the company's cash cow, and is expected to bring a new strategic focus and leadership to the company.
- Improved Financials: Disney reported $3.3 billion in operating income in Q1 2026, accounting for 38.5% of total revenue, indicating strong performance from the Experiences segment that is likely to drive overall financial recovery.
- Expansion Investment Plans: D’Amaro announced a $60 billion investment over the next decade to expand theme parks and plans to double the cruise line fleet by 2031, further solidifying the company's market position.
- Attractive Valuation: Disney's stock trades at less than 15 times its 2026 earnings estimates, combined with an expected annual earnings growth of 11% to 12%, showcasing strong investment appeal despite a mere 6% stock price increase over the past decade.
See More
