Walt Disney Stock: A Buy After Quarterly Report? It's Complicated

The Walt Disney Company (DIS) recently reported its fiscal 2025 first-quarter earnings, leaving investors with a mixed bag of results. While the entertainment giant's streaming and experiences businesses have been a focus of late, the quarter's performance was a tale of two halves. Let's dive into the key takeaways and explore whether Disney stock is a buy after the quarterly report.



The Good

Disney's streaming business, consisting of Hulu, Disney+, and ESPN+, turned profitable earlier than expected in the third quarter and profits grew in Q4. The company's direct-to-consumer (DTC) operating income increased by $431 million to $293 million, reflecting improved profitability. Additionally, Disney+ crossed the 120 million subscriber mark, boosting its bottom line.



The entertainment powerhouse's streaming business touted that Disney+ has crossed the 120 million subscriber mark and boosted its bottom line, reporting operating income of $321 million. The stock was up 6.23 percent at market close, with multiple analysts raising their stock price targets on the Burbank-based studio conglomerate.

The Bad

While Disney's streaming business has been a bright spot, the company's Experiences segment profitability took a hit in the quarter due to costs associated with its new cruise ships and impact on park attendance from the hurricanes that hit the South late last year. Disney's domestic parks and experiences operating income declined 5%, reflecting a 9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses.

Moreover, Disney's stock has been volatile in recent months, with shares up about 14% over the last 12 months but down 10% year-to-date. The company's valuation has also come under scrutiny, with some analysts questioning whether the stock is overvalued.

The Complicated

So, is Walt Disney stock a buy after the quarterly report? It's complicated. On one hand, Disney's streaming business has shown remarkable growth and profitability, and the company's content library remains unmatched. On the other hand, the Experiences segment's profitability took a hit, and the stock's recent volatility may give investors pause.



Ultimately, the decision to buy, sell, or hold Disney stock depends on an investor's risk tolerance and investment horizon. While the quarterly report offered a mixed bag of results, Disney's long-term prospects remain strong, driven by its robust content library and strategic investments in streaming and experiences. However, investors should keep a close eye on the company's earnings and valuation as the year progresses.

In conclusion, Walt Disney stock is a complicated buy after the quarterly report. While the streaming business has shown impressive growth and profitability, the Experiences segment's profitability took a hit, and the stock's recent volatility may give investors pause. Investors should carefully consider their risk tolerance and investment horizon before making a decision on Disney stock.