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The market conditions have not been ideal for investors over the last few weeks, to say the least. The unique economic environment we have found ourselves in coming out of a once-in-a-lifetime pandemic has weighed heavily on investors’ sentiment, especially during earnings season. Many companies reporting their quarterly results have had their operations disrupted by supply-chain bottlenecks, soaring energy prices, and geopolitical issues.
Nonetheless, the show must go on, and so must earnings season. There are very minimal situations in the market in which investors can take a breather, so it is vital to remain focused on the long-term picture of things, even during dark times.
On deck to report quarterly results after the bell rings on Wednesday is the ever-popular Disney (DIS - Free Report) . Disney has transformed itself into a significant player in the streaming arena over the last few years while continuing its operations within its ever-beloved theme parks.
Streaming names have been hit hard throughout 2022. We can see this in the chart below that illustrates the year-to-date performance of two other streaming giants – Netflix (NFLX - Free Report) and Roku (ROKU - Free Report) – while blending in the S&P 500 for a benchmark.
Image Source: Zacks Investment Research
Disney has shown significant relative strength compared to ROKU and NFLX, but shares have lost nearly a third of their value year-to-date. Upon stretching out the timeframe over the last year, the story remains the same; Disney has been able to outpace NFLX and ROKU quite considerably.
Image Source: Zacks Investment Research
Let’s take a closer look into how DIS is shaping up for its upcoming quarterly release.
Previous Earnings Impact
Over its last six quarterly reports, shares have had mixed reactions to earnings releases. There have been two instances where the company has smoked EPS estimates by triple digits, yet shares still moved downwards following the report. However, DIS beat EPS estimates by nearly 86% in its latest quarterly report, fueling a 7% upwards move for shares.
Image Source: Zacks Investment Research
These mixed reactions make it challenging to form an accurate data-based prediction of where shares stand to move following the quarterly report. However, it’s worth noting that many companies’ quarterly releases have caused shares to take a downward trajectory over the last few weeks.
Growth Driver
A key metric that will undoubtedly be watched like a hawk will be the company’s streaming subscriber count and growth. Disney+ has been a revelation for consumers, allowing them access to a vast selection of some of the most famous movie titles and franchises globally, such as Star Wars and Marvel’s Avengers movies.
The company also has ESPN+, home to Ultimate Fighting Championship (UFC) events, and owns a majority stake in Hulu, a widely-popular streaming service with hit shows such as The Handmaid’s Tale. These two services provide diverse streaming service revenue, ranging from sports to various genres of TV content.
Disney+ has been a massive success for the company. In its latest quarterly release, the overall subscriber count for this service surged 18% from the year-ago quarter up to 42.9 million. Additionally, the average monthly revenue per paid subscriber on the Disney+ service was up to $6.68, up 15% from 2021.
Unlike other streaming services, what sets DIS apart is its unique ability to further monetize content via its widely-hailed entertainment parks and other related merchandise that the company can sell.
Quarterly Estimates
EPS estimates for DIS are looking robust heading into Wednesday. For the quarter, the Consensus Estimate Trend has increased by a respectable 2.5% over the last 60 days to $1.20 per share, boosted by three analysts positively revising their quarterly estimates. Additionally, the quarterly estimate reflects a very sizable 51% growth in earnings from the year-ago quarter.
Revenue estimates are looking solid as well for the quarter. The Zacks Consensus Sales Estimate has DIS raking in $20.3 billion for the quarter, a notable 30% increase in the top line from the year-ago quarter’s revenue of $15.6 billion. For the current year, Disney’s top line is expected to surge 26% year-over-year from 2021.
Netflix Comparison
We all witnessed the meltdown within Netflix (NFLX - Free Report) shares following its quarterly release, so it’s appropriate to compare the company to see if we can obtain a clearer picture of what to expect from DIS.
NFLX’s valuation was slashed by double-digits following its quarterly report, mainly driven by a slowdown in the growth picture for the company. Following a pandemic surge in subscribers that massively drove the run shares went on, NFLX’s subscriber count and growth rate have since significantly cooled off.
Disney has been able to reap the rewards of its own content, and Disney+ is still on track to achieve its guidance of 230 – 260 million paid subscribers by the end of FY24.
Additionally, DIS has other streams of revenue pouring in from its theme parks paired with pent-up demand thanks to COVID-19 shutting the world down, which will further drive top-line growth in the near future.
The COVID-19 induced surge in online streaming is very much cooling off. With the world re-opening, many consumers have turned away from the TV and are enjoying the outside world again. Disney stands to capitalize here with its theme parks that have amassed a ton of pent-up demand.
Furthermore, ESPN+ and Hulu subscriber counts have been increasing alongside Disney+, boding well for the company’s streaming line of business.
The quarter’s revenue and EPS forecasts are looking solid, and Disney’s bottom line is expected to expand by 23% over the next three to five years. It looks beneficial for investors to implement a defense-first approach to the quarterly release; earnings season has not been kind to many companies. However, Disney is looking well-rounded heading into Wednesday, and with the re-opening of the world paired with a massive catalog of streaming options, the future does look bright.
The Walt Disney Company Price, Consensus and EPS Surprise
Image: Shutterstock
Disney Q2 Preview: Can Shares Rebound?
The market conditions have not been ideal for investors over the last few weeks, to say the least. The unique economic environment we have found ourselves in coming out of a once-in-a-lifetime pandemic has weighed heavily on investors’ sentiment, especially during earnings season. Many companies reporting their quarterly results have had their operations disrupted by supply-chain bottlenecks, soaring energy prices, and geopolitical issues.
Nonetheless, the show must go on, and so must earnings season. There are very minimal situations in the market in which investors can take a breather, so it is vital to remain focused on the long-term picture of things, even during dark times.
On deck to report quarterly results after the bell rings on Wednesday is the ever-popular Disney (DIS - Free Report) . Disney has transformed itself into a significant player in the streaming arena over the last few years while continuing its operations within its ever-beloved theme parks.
Streaming names have been hit hard throughout 2022. We can see this in the chart below that illustrates the year-to-date performance of two other streaming giants – Netflix (NFLX - Free Report) and Roku (ROKU - Free Report) – while blending in the S&P 500 for a benchmark.
Image Source: Zacks Investment Research
Disney has shown significant relative strength compared to ROKU and NFLX, but shares have lost nearly a third of their value year-to-date. Upon stretching out the timeframe over the last year, the story remains the same; Disney has been able to outpace NFLX and ROKU quite considerably.
Image Source: Zacks Investment Research
Let’s take a closer look into how DIS is shaping up for its upcoming quarterly release.
Previous Earnings Impact
Over its last six quarterly reports, shares have had mixed reactions to earnings releases. There have been two instances where the company has smoked EPS estimates by triple digits, yet shares still moved downwards following the report. However, DIS beat EPS estimates by nearly 86% in its latest quarterly report, fueling a 7% upwards move for shares.
Image Source: Zacks Investment Research
These mixed reactions make it challenging to form an accurate data-based prediction of where shares stand to move following the quarterly report. However, it’s worth noting that many companies’ quarterly releases have caused shares to take a downward trajectory over the last few weeks.
Growth Driver
A key metric that will undoubtedly be watched like a hawk will be the company’s streaming subscriber count and growth. Disney+ has been a revelation for consumers, allowing them access to a vast selection of some of the most famous movie titles and franchises globally, such as Star Wars and Marvel’s Avengers movies.
The company also has ESPN+, home to Ultimate Fighting Championship (UFC) events, and owns a majority stake in Hulu, a widely-popular streaming service with hit shows such as The Handmaid’s Tale. These two services provide diverse streaming service revenue, ranging from sports to various genres of TV content.
Disney+ has been a massive success for the company. In its latest quarterly release, the overall subscriber count for this service surged 18% from the year-ago quarter up to 42.9 million. Additionally, the average monthly revenue per paid subscriber on the Disney+ service was up to $6.68, up 15% from 2021.
Unlike other streaming services, what sets DIS apart is its unique ability to further monetize content via its widely-hailed entertainment parks and other related merchandise that the company can sell.
Quarterly Estimates
EPS estimates for DIS are looking robust heading into Wednesday. For the quarter, the Consensus Estimate Trend has increased by a respectable 2.5% over the last 60 days to $1.20 per share, boosted by three analysts positively revising their quarterly estimates. Additionally, the quarterly estimate reflects a very sizable 51% growth in earnings from the year-ago quarter.
Revenue estimates are looking solid as well for the quarter. The Zacks Consensus Sales Estimate has DIS raking in $20.3 billion for the quarter, a notable 30% increase in the top line from the year-ago quarter’s revenue of $15.6 billion. For the current year, Disney’s top line is expected to surge 26% year-over-year from 2021.
Netflix Comparison
We all witnessed the meltdown within Netflix (NFLX - Free Report) shares following its quarterly release, so it’s appropriate to compare the company to see if we can obtain a clearer picture of what to expect from DIS.
NFLX’s valuation was slashed by double-digits following its quarterly report, mainly driven by a slowdown in the growth picture for the company. Following a pandemic surge in subscribers that massively drove the run shares went on, NFLX’s subscriber count and growth rate have since significantly cooled off.
Disney has been able to reap the rewards of its own content, and Disney+ is still on track to achieve its guidance of 230 – 260 million paid subscribers by the end of FY24.
Additionally, DIS has other streams of revenue pouring in from its theme parks paired with pent-up demand thanks to COVID-19 shutting the world down, which will further drive top-line growth in the near future.
Netflix, Inc. Price, Consensus and EPS Surprise
Netflix, Inc. price-consensus-eps-surprise-chart | Netflix, Inc. Quote
Bottom Line
The COVID-19 induced surge in online streaming is very much cooling off. With the world re-opening, many consumers have turned away from the TV and are enjoying the outside world again. Disney stands to capitalize here with its theme parks that have amassed a ton of pent-up demand.
Furthermore, ESPN+ and Hulu subscriber counts have been increasing alongside Disney+, boding well for the company’s streaming line of business.
The quarter’s revenue and EPS forecasts are looking solid, and Disney’s bottom line is expected to expand by 23% over the next three to five years. It looks beneficial for investors to implement a defense-first approach to the quarterly release; earnings season has not been kind to many companies. However, Disney is looking well-rounded heading into Wednesday, and with the re-opening of the world paired with a massive catalog of streaming options, the future does look bright.
The Walt Disney Company Price, Consensus and EPS Surprise
The Walt Disney Company price-consensus-eps-surprise-chart | The Walt Disney Company Quote