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The Zacks Media Conglomerates industry is flourishing, driven by the consumer shift toward over-the-top (OTT) content. Major players like Disney (DIS - Free Report) , Atlanta Braves Holdings, Inc. (BATRK - Free Report) and Madison Square Garden Entertainment Corp. (MSGE - Free Report) are aggressively investing in developing original music, shows and fresh content to captivate and retain Gen Z and millennial subscribers. Moreover, the industry's prospects are bolstered by the availability of cost-effective alternative packages, such as skinny bundles, designed to entice consumers with lower prices compared to traditional offerings. Conversely, the industry grapples with waning broadcast television ratings and diminishing demand for home entertainment sales of theatrical content. Furthermore, advertisers' tepid spending amid rampant inflation and elevated interest rates poses a formidable concern for industry players.
Industry Description
The Zacks Media Conglomerates industry encompasses companies engaged in creating and distributing various content forms, from entertainment to educational materials. These firms also offer travel and consumer products. The industry is adapting to the shift toward OTT content, both subscription-based and ad-supported. Advertising remains a key revenue source, while the metaverse presents new opportunities. Subscription price increases, driven by growing subscriber numbers, offer potential revenue growth. However, the industry faces challenges that include declining broadcast TV ratings, reduced demand for home entertainment versions of theatrical releases, and increasing cord-cutting trends. Despite these obstacles, media conglomerates continue to evolve, leveraging new technologies and consumer preferences to maintain their market position.
3 Trends Shaping the Future of the Media Industry
Original Content Driving Growth: Media companies' capacity to generate advertising revenues beyond traditional TV platforms, such as websites and other digitally consumed channels, unlocks increased opportunities for targeted advertising. The growing consumer preference for subscription services over linear pay-TV and rental or outright purchases has compelled industry players to adapt their business models. Media companies are innovating with original content to attract and retain subscribers.
High-Speed Internet Demand Acting as a Key Catalyst: The burgeoning demand for high-speed Internet, including broadband, has benefited media industry participants. Improving Internet speed has fueled the demand for high-quality videos and the trend of binge-watching. Furthermore, a strengthening broadband ecosystem in international markets, coupled with the proliferation of smart TVs, is expected to drive growth.
Cord-Cutting and Matured PayTV Industry Hurting Prospects: The media television industry is undergoing a rapid evolution of distribution platforms, embracing new players and advanced technologies. The declining profitability of residential video services due to rising programming costs and retransmission fees has made survival challenging for traditional companies. Additionally, the heightened demand for on-demand content has led to the mushrooming of streaming service providers, making it increasingly difficult for traditional media television companies to maintain their viewer base.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Media Conglomerates industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #44, which places it in the top 18% of more than 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates continued outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms the Sector, Lags the S&P 500
The Zacks Media Conglomerates industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.
The industry has returned 4.9% in the abovementioned period compared with the broader sector’s growth of 15.8%. The S&P 500 has risen 10% during the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month P/S, a commonly used multiple for valuing media companies, we see that the industry is currently trading at 1.51X compared with the S&P 500’s 5.33X and the sector’s 2.28X.
Over the past five years, the industry has traded as high as 2.88X and as low as 1.1X, with a median of 1.44X, as the charts below show.
Trailing 12-Month Price-to-Sales (P/S) Ratio
3 Media Stocks to Buy
Atlanta Braves Holdings: This Zacks Rank #1 (Strong Buy) company presents a compelling investment opportunity. In the recently reported first-quarter 2025 results, total revenues grew 27% year over year to $47 million, with baseball revenues increasing 30% to $29 million and mixed-use development revenues rising 23% to $19 million. The company maintains a healthy cash position of $244.7 million and has access to $275 million in untapped liquidity through two baseball revolvers, providing significant financial flexibility. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Battery Atlanta development continues to attract premium tenants, with Shake Shack announcing both a flagship restaurant and its second U.S. support center, while the acquisition of Pennant Park adds strategic diversification and recurring revenue streams. On the baseball front, early ticket sales have been robust with seven sellouts already this season, and upcoming high-profile events like the MLB All-Star Game and Speedway Classic should boost visibility and revenues.
The Zacks Consensus Estimate for the company’s 2025 earnings is pegged at a loss of 54 cents per share, unchanged over the past 30 days. BATRK shares have risen 8.2% year to date.
Price and Consensus: BATRK
Disney: This Zacks Rank #2 (Buy) company warrants investor attention in 2025 following its outstanding second-quarter fiscal 2025 results, which demonstrated robust execution across all business segments. The company has successfully navigated the streaming transition, with Disney+ and Hulu reaching profitability while growing to 180.7 million combined subscriptions. This achievement, coupled with a powerful content pipeline featuring upcoming blockbusters like Avatar: Fire and Ash and Zootopia 2, positions Disney for sustained growth.
The Experiences segment continues to thrive with domestic Parks operating income up 13%, while the expansion of Disney Cruise Line and unprecedented global park development projects create additional growth vectors. ESPN's record viewership and forthcoming direct-to-consumer platform further enhance Disney's digital transformation story. Trading at a discounted 19.25 times trailing earnings — below the industry average of 21.37 — Disney offers exceptional value with its raised guidance projecting 16% EPS growth and $17 billion in operating cash flow for fiscal 2025. This combination of profitable growth, strong franchises, and attractive valuation makes Disney a compelling buy for long-term investors.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has moved north by 3.8% to $5.69 per share over the past 30 days. DIS shares have returned 0.1% year to date.
Price and Consensus: DIS
Madison Square Garden Entertainment: This Zacks Rank #2 company continues building momentum backed by strong financial performance and strategic positioning. The company's third-quarter fiscal 2025 results demonstrate robust growth with revenues up 6% to $242.5 million and adjusted operating income surging 50% to $57.9 million year over year. MSGE continues to show financial discipline through its share repurchase program, buying back $40 million in stock year to date.
The company's diverse revenue streams — spanning iconic venues like Madison Square Garden and Radio City Music Hall — are bolstered by high-profile partnerships with brands like PepsiCo and Liquid Death. The record-setting Christmas Spectacular generated more than $170 million across 200 performances, with strong advance sales for the upcoming season. With solid concert bookings projected for fiscal 2026, continued growth in premium hospitality offerings, and management's confidence in delivering mid-to-high single-digit AOI growth, MSGE is well-positioned to continue creating substantial shareholder value.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has remained steady at $1.15 per share over the past 30 days. MSGE shares have returned 5.7% year to date.
Price and Consensus: MSGE
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3 Media Stocks to Buy From a Prospering Industry
The Zacks Media Conglomerates industry is flourishing, driven by the consumer shift toward over-the-top (OTT) content. Major players like Disney (DIS - Free Report) , Atlanta Braves Holdings, Inc. (BATRK - Free Report) and Madison Square Garden Entertainment Corp. (MSGE - Free Report) are aggressively investing in developing original music, shows and fresh content to captivate and retain Gen Z and millennial subscribers. Moreover, the industry's prospects are bolstered by the availability of cost-effective alternative packages, such as skinny bundles, designed to entice consumers with lower prices compared to traditional offerings. Conversely, the industry grapples with waning broadcast television ratings and diminishing demand for home entertainment sales of theatrical content. Furthermore, advertisers' tepid spending amid rampant inflation and elevated interest rates poses a formidable concern for industry players.
Industry Description
The Zacks Media Conglomerates industry encompasses companies engaged in creating and distributing various content forms, from entertainment to educational materials. These firms also offer travel and consumer products. The industry is adapting to the shift toward OTT content, both subscription-based and ad-supported. Advertising remains a key revenue source, while the metaverse presents new opportunities. Subscription price increases, driven by growing subscriber numbers, offer potential revenue growth. However, the industry faces challenges that include declining broadcast TV ratings, reduced demand for home entertainment versions of theatrical releases, and increasing cord-cutting trends. Despite these obstacles, media conglomerates continue to evolve, leveraging new technologies and consumer preferences to maintain their market position.
3 Trends Shaping the Future of the Media Industry
Original Content Driving Growth: Media companies' capacity to generate advertising revenues beyond traditional TV platforms, such as websites and other digitally consumed channels, unlocks increased opportunities for targeted advertising. The growing consumer preference for subscription services over linear pay-TV and rental or outright purchases has compelled industry players to adapt their business models. Media companies are innovating with original content to attract and retain subscribers.
High-Speed Internet Demand Acting as a Key Catalyst: The burgeoning demand for high-speed Internet, including broadband, has benefited media industry participants. Improving Internet speed has fueled the demand for high-quality videos and the trend of binge-watching. Furthermore, a strengthening broadband ecosystem in international markets, coupled with the proliferation of smart TVs, is expected to drive growth.
Cord-Cutting and Matured PayTV Industry Hurting Prospects: The media television industry is undergoing a rapid evolution of distribution platforms, embracing new players and advanced technologies. The declining profitability of residential video services due to rising programming costs and retransmission fees has made survival challenging for traditional companies. Additionally, the heightened demand for on-demand content has led to the mushrooming of streaming service providers, making it increasingly difficult for traditional media television companies to maintain their viewer base.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Media Conglomerates industry is housed within the broader Zacks Consumer Discretionary sector. It carries a Zacks Industry Rank #44, which places it in the top 18% of more than 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates continued outperformance in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are optimistic about this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms the Sector, Lags the S&P 500
The Zacks Media Conglomerates industry has underperformed the broader Zacks Consumer Discretionary sector and the S&P 500 composite over the past year.
The industry has returned 4.9% in the abovementioned period compared with the broader sector’s growth of 15.8%. The S&P 500 has risen 10% during the same time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing 12-month P/S, a commonly used multiple for valuing media companies, we see that the industry is currently trading at 1.51X compared with the S&P 500’s 5.33X and the sector’s 2.28X.
Over the past five years, the industry has traded as high as 2.88X and as low as 1.1X, with a median of 1.44X, as the charts below show.
Trailing 12-Month Price-to-Sales (P/S) Ratio
3 Media Stocks to Buy
Atlanta Braves Holdings: This Zacks Rank #1 (Strong Buy) company presents a compelling investment opportunity. In the recently reported first-quarter 2025 results, total revenues grew 27% year over year to $47 million, with baseball revenues increasing 30% to $29 million and mixed-use development revenues rising 23% to $19 million. The company maintains a healthy cash position of $244.7 million and has access to $275 million in untapped liquidity through two baseball revolvers, providing significant financial flexibility. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Battery Atlanta development continues to attract premium tenants, with Shake Shack announcing both a flagship restaurant and its second U.S. support center, while the acquisition of Pennant Park adds strategic diversification and recurring revenue streams. On the baseball front, early ticket sales have been robust with seven sellouts already this season, and upcoming high-profile events like the MLB All-Star Game and Speedway Classic should boost visibility and revenues.
The Zacks Consensus Estimate for the company’s 2025 earnings is pegged at a loss of 54 cents per share, unchanged over the past 30 days. BATRK shares have risen 8.2% year to date.
Price and Consensus: BATRK
Disney: This Zacks Rank #2 (Buy) company warrants investor attention in 2025 following its outstanding second-quarter fiscal 2025 results, which demonstrated robust execution across all business segments. The company has successfully navigated the streaming transition, with Disney+ and Hulu reaching profitability while growing to 180.7 million combined subscriptions. This achievement, coupled with a powerful content pipeline featuring upcoming blockbusters like Avatar: Fire and Ash and Zootopia 2, positions Disney for sustained growth.
The Experiences segment continues to thrive with domestic Parks operating income up 13%, while the expansion of Disney Cruise Line and unprecedented global park development projects create additional growth vectors. ESPN's record viewership and forthcoming direct-to-consumer platform further enhance Disney's digital transformation story. Trading at a discounted 19.25 times trailing earnings — below the industry average of 21.37 — Disney offers exceptional value with its raised guidance projecting 16% EPS growth and $17 billion in operating cash flow for fiscal 2025. This combination of profitable growth, strong franchises, and attractive valuation makes Disney a compelling buy for long-term investors.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has moved north by 3.8% to $5.69 per share over the past 30 days. DIS shares have returned 0.1% year to date.
Price and Consensus: DIS
Madison Square Garden Entertainment: This Zacks Rank #2 company continues building momentum backed by strong financial performance and strategic positioning. The company's third-quarter fiscal 2025 results demonstrate robust growth with revenues up 6% to $242.5 million and adjusted operating income surging 50% to $57.9 million year over year. MSGE continues to show financial discipline through its share repurchase program, buying back $40 million in stock year to date.
The company's diverse revenue streams — spanning iconic venues like Madison Square Garden and Radio City Music Hall — are bolstered by high-profile partnerships with brands like PepsiCo and Liquid Death. The record-setting Christmas Spectacular generated more than $170 million across 200 performances, with strong advance sales for the upcoming season. With solid concert bookings projected for fiscal 2026, continued growth in premium hospitality offerings, and management's confidence in delivering mid-to-high single-digit AOI growth, MSGE is well-positioned to continue creating substantial shareholder value.
The Zacks Consensus Estimate for the company’s fiscal 2025 earnings has remained steady at $1.15 per share over the past 30 days. MSGE shares have returned 5.7% year to date.
Price and Consensus: MSGE