Paramount Skydance Rose 17% From Lows on Better Guidance-But the Stock May Still Be Too Cheap

Better guidance has not fully changed the market story

The key debate is whether Paramount Skydance has already repriced for the improved outlook, or whether the market is still anchored to an old fear cycle. On one hand, this was a real improvement: Paramount raised its full-year 2026 adjusted EBITDA outlook and reported better numbers in parts of the business that matter most to the future story. On the other hand, the shares are still 17.1% above the 52-week low and remain well below more normal valuation levels. That gap suggests investors are acknowledging the improvement, but not yet fully embracing a turnaround narrative.

The crisis narrative is still dominating the multiple

That skepticism is understandable. Paramount is still dealing with an antitrust challenge linked to the proposed Warner Bros. Discovery combination, and that uncertainty limits the company's ability to shake off the crisis label. Until that overhang fades, the stock may keep carrying a skepticism premium even if the operating base is stabilizing.

If investors start valuing Paramount less as a company in distress and more as a business working through that distress, the upside could come from both earnings and multiple expansion.

Two parts of the business are telling different stories

Streaming and broadcast are improving, while linear TV still drags

Paramount now looks like a split system. The newer engine is clearly improving: in the first quarter, Q1 revenue of $7.3 billion came with DTC revenue up 11% year over year, while DTC adjusted EBITDA improved to $251 million. The content pipeline is also performing well, with Landman becoming Paramount+'s most-watched series ever and CBS holds 13 of the top 20 primetime series.

The older engine is still a headwind. Recent reporting also highlighted the continued strengths of streaming and weaknesses of linear TV, which helps explain why the bear case still feels credible even after management lifted its full-year outlook. The market is essentially split between the improving streaming/library side and the still-challenging linear TV side.

Why investors focus on the weak half

That split helps explain the stock's behavior. When a company has spent a long time in crisis, investors often weight the bad news more heavily because it confirms the story they already believe. At the same time, improvement in other parts of the business can feel too gradual to change the overall judgment.

That does not mean the operating picture is bad across the board. It means the market is waiting for stronger confirmation that the better numbers can outweigh the legacy drag long enough to reshape the valuation.