Entertainment giant Warner Bros. Discovery (WBD) released its earnings report earlier today, and the news was perhaps mixed. There were some high points, some points that were not so high, and some genuine concern to go around. That came mostly from investors, who torpedoed Warner shares, sending them down over 7% in the closing minutes of Thursday’s trading.
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Warner reported revenue of $9.8 billion, which was up, if not much, from the second quarter of last year. Net income came in at $1.6 billion, which was actually a huge win. This time last year, Warner reported a loss outright, reports noted. CEO David Zaslav noted that driving growth depended on “…a wealth of properties, quality properties, that reinforce you only get this at HBO Max.”
The unquestioned winner of the earnings report was the studios division, which pulled off a coup, bringing in $3.8 billion by itself. That was a 55% jump against the year-ago figures, thanks to a slate of major productions that pulled in wins. The streaming business certainly contributed, as Warner reported adding 3.4 million subscribers for its streaming services. However, the linear television market proved to be the usual drag. It brought in $4.8 billion by itself, but that was down 9% against this time last year. Losing the NCAA March Madness Final Four this year proved a particular blow.
Pushing the Niche Sports
The loss of basketball has been rough for Warner, but its strategy of pursuing niche sports seems to be paying some dividends. Warner, along with the Union Cycliste Internationale (UCI), recently announced numbers on the 2025 WHOOP UCI Mountain Bike World Series. The series is halfway over, reports note, but there have already been 56 million cumulative views as well as 15 million hours of watch time.
This is a fairly large step up from previous years, reports note, but there has not been a lot of information from Warner breaking down the total hours or any kind of independent verification. Still, with numbers like these, Warner may well have landed on an exciting new strategy of calling attention to lesser-known sports and letting sports fans enjoy the result.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 82.19% rally in its share price over the past year, the average WBD price target of $13.36 per share implies 12.65% upside potential.
