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Warner Bros (WBD)
NASDAQ:WBD
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Warner Bros
(NASDAQ:WBD)
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Rating:68Neutral
Price Target:
$32.00
▲(10.73% Upside)
Action:DowngradedDate:12/11/25
Warner Bros. Discovery's overall stock score reflects a strong earnings call performance and technical momentum, offset by high valuation concerns and mixed financial performance. The company's strategic initiatives in streaming and box office leadership are promising, but challenges in revenue growth and valuation remain significant.
Positive Factors
Box Office Leadership
Leading the global box office with over $4 billion in revenue reinforces Warner Bros.' strong market position and brand strength, ensuring continued revenue streams from theatrical releases.
Streaming Subscriber Growth
Significant growth in streaming subscribers indicates successful global expansion and strengthens Warner Bros.' competitive position in the digital content market.
Debt Reduction
Effective debt reduction improves financial flexibility and reduces interest expenses, enhancing Warner Bros.' ability to invest in growth opportunities and withstand economic fluctuations.
Negative Factors
Declining Revenue Growth
A decline in revenue growth suggests potential challenges in maintaining market share and could impact future profitability if not addressed through strategic initiatives.
Linear Television Challenges
Challenges in the linear television segment highlight structural industry shifts towards digital, requiring Warner Bros. to adapt its strategy to sustain long-term revenue.
Low Return on Equity
Low ROE reflects inefficiencies in generating returns from shareholder equity, which could hinder Warner Bros.' ability to attract investment and finance growth initiatives.
Warner Bros (WBD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$72.29B
Dividend YieldN/A
Average Volume (3M)21.67M
Price to Earnings (P/E)154.1
Beta (1Y)1.27
Revenue Growth-4.29%
EPS GrowthN/A
CountryUS
Employees35,000
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)-0.10
Shares Outstanding2,479,887,500
10 Day Avg. Volume19,604,595
30 Day Avg. Volume21,674,148
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)0.76
Price to Sales (P/S)0.66
P/FCF Ratio5.85
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit6.08
Enterprise Value/Ebitda5.19
Forecast
1Y Price Target
$29.25Price Target Upside1.21% Upside
Rating ConsensusHold
Number of Analyst Covering14
EPS Forecast (FY)-0.19
Revenue Forecast (FY)$37.05B
Warner Bros Business Overview & Revenue Model
Company DescriptionWarner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Studios, Network, and DTC. The Studios segment produces and releases feature films for initial exhibition in theaters; produces and licenses television programs to its networks and third parties and direct-to-consumer services; distributes films and television programs to various third parties and internal television; and offers streaming services and distribution through the home entertainment market, themed experience licensing, and interactive gaming. The Network segment comprises domestic and international television networks. The DTC segment offers premium pay-tv and streaming services. In addition, the company offers portfolio of content, brands, and franchises across television, film, streaming, and gaming under the Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, HBO, HBO Max, Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT Sports, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings brands. Further, it provides content through distribution platforms, including linear network, free-to-air, and broadcast television; authenticated GO applications, digital distribution arrangements, content licensing arrangements, and direct-to-consumer subscription products. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.
How the Company Makes MoneyWarner Bros. Discovery generates revenue through multiple key streams. Primarily, the company earns money from content licensing and distribution, allowing its films and television shows to be aired on various platforms, including third-party networks and streaming services. Additionally, WBD operates subscription-based streaming services like HBO Max, which contribute significantly to its earnings. Advertising revenue from its television networks also serves as a major source of income, driven by viewership and advertising partnerships. Furthermore, WBD benefits from merchandise sales related to its popular franchises and licensing agreements with third-party companies. Strategic partnerships with other media companies and platforms enhance its distribution reach and revenue opportunities, contributing to its overall financial performance.
Warner Bros Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes income from different business areas like film, TV, and streaming, highlighting which segments drive growth and profitability.
Analyzes income from different business areas like film, TV, and streaming, highlighting which segments drive growth and profitability.
Data provided by:
The Fly
The FlyWarner Bros Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call emphasized strong creative and commercial momentum across studios, HBO/HBO Max streaming scale and subscriber targets, improved advertising trends, and sports/event engagement — balanced against persistent secular pressures in linear, an underwhelming recent games launch with a thin near-term pipeline, and investor focus on leverage around the Discovery Global separation. Management framed the highlights as durable and positioned for further monetization (price, ads, share enforcement) and believes Discovery Global's leverage profile is sustainable.Q4-2025 Updates
Positive Updates
Box Office and Film Slate Outperformance
Warner Bros. Motion Picture Group delivered seven consecutive films opening > $40,000,000, spent 16 total weeks atop the global box office, had nine films debut at #1, won nine Golden Globe Awards, and is up for 30 Academy Awards. The recent original films generated over $160,000,000 at the global box office in two weeks, including an $83,000,000 opening weekend.
Streaming Subscriber Scale and Outlook
HBO Max scaling globally: management is on track to reach >140,000,000 total streaming subscribers by the end of Q1 and expects to exceed 150,000,000 subscribers by the end of the year. Executives cited global launches (Germany, Italy, UK, Ireland) and continued international expansion as key drivers.
Strong Linear & Network Audience Share
WBD's portfolio attracted 30% of all prime-time cable viewing in the U.S., with HBO and linear networks delivering multiple breakout series and sequential audience growth (some shows seeing 30–50% audience growth versus prior seasons).
Significant Sports and Event Engagement
During the 2026 Milano Cortina Olympic Winter Games WBD more than tripled its streaming audience and saw >50% growth in linear hours viewed across Europe versus the 2022 Winter Games; WBD also reported 440 sports events in the past 12 months that reached ≥2,000,000 viewers.
Advertising Trends Improving
Management reported sequential improvement in advertising trends in Q4 that continued into Q1, with stronger scatter premiums, healthy upfronts, and positive international ad sales trends (management expects international ad sales to be flat to slightly up for the year).
Streaming Monetization & Product Levers
WBD identified multiple growth levers for streaming: stronger original content, major market launches, password-sharing enforcement scaling in 2026, product and engagement improvements, and monetization via price increases and ad tiers (management noted international ad fill rates remain relatively low, implying upside).
Studio & TV Creative Renaissance
Management emphasized a creative turnaround across Warner Bros. Motion Pictures, HBO, and Warner Bros. Television — retaining and adding top creative talent, rebuilding franchises (e.g., Minecraft, Superman, Batman) and delivering hit series that drove meaningful social engagement and high viewership metrics (examples: series averaging 13M, 24M, and 27M viewers per episode cited).
Discovery Global Separation and Capital Positioning
Management announced planned separation of Discovery Global with expected pro forma net leverage for Discovery Global around ~3.3x, which management believes is sustainable. They indicated expected credit ratings in the single-B to low double-B range and showed confidence in the standalone international/linear economics and profitability of Discovery+ in many markets.
Games Pipeline Reset and Upcoming Titles
After a reset, the games pipeline is being refocused on proven studios and franchises. Two notable 2026 releases were highlighted: a TT Games console/PC title launching in May and a mobile follow-up (Dragonfire) to Game of Thrones: Conquest launching in summer 2026; management emphasized past long-term returns from existing mobile titles.
Negative Updates
Secular Headwinds and Network Challenges
Management acknowledged persistent secular headwinds affecting linear TV and some parts of the business, and noted that international and domestic ad trends vary by region. CNN experienced ad sales headwinds earlier in the period (though audience uptick was later noted).
Advertising Headwinds from NBA Exposure
Management said the NBA created a headwind to ad sales in the period; while other sports (MLB playoffs, NHL) performed well, NBA-related costs/impacts were cited as an issue that affected advertising comparables.
Video Games: Recent Launch Failures and Pipeline Gaps
WBD conceded a 2024 games launch was 'unfortunately unsuccessful' and 2025 was a reset year; as a result, the 2026 pipeline is only modestly replenished and is expected to look similar to 2025, limiting near-term games contribution to EBITDA.
Password-Sharing and Monetization Still Early
Password-sharing enforcement is only in its 'second inning' and has not yet been globally expanded; monetization benefits from that initiative and international ad tiers are therefore still early and will take time to scale.
Investor Concerns Over Leverage and Separation
Investors have focused on Discovery Global leverage; while management projects ~3.3x net leverage and considers it sustainable, the separation and capital allocation remain a point of debate and scrutiny—management provided a proxy range of $0–$2,000,000,000 for certain items, signaling room for variability.
Operational Efficiency & Cost Actions Ongoing
Management referenced the need for continued efficiencies (including use of AI) and noted OpEx and cost savings targets for 2026 as part of the Discovery Global plan, implying ongoing restructuring/efficiency work and discretionary cost controls.
Company Guidance
Management's guidance emphasized streaming scale and spin‑off financials: HBO Max is on track to surpass 140 million total streaming subscribers by the end of Q1 2026 and to exceed 150 million by year‑end 2026, with streaming profits targeted to roughly triple by 2030; Discovery Global is expected to emerge with roughly 3.3x net leverage (proxy allowance of $0–$2.0 billion of flexibility) and likely single‑B to low double‑B ratings. They expect international ad sales to be flat to slightly up in 2026 and reported sequential advertising improvement into Q1, while U.S. linear networks delivered ~30% of prime‑time cable viewing; management also cited eight price increases to date (a 63% increase in value noted), Winter Games‑driven >50% growth in European linear hours and a >3x streaming audience lift, and strong theatrical KPIs (seven consecutive $40M+ openings, 16 weeks atop the global box office, nine #1 debuts, and >$160M box office in two weeks including an $83M opening weekend).Warner Bros Financial Statement Overview
Summary
Warner Bros presents a mixed financial picture with positive profitability margins and strong cash flow metrics. However, challenges remain with declining revenue growth and low return on equity. The balance sheet is stable, but improving profitability and growth will be crucial for future success.Income Statement
Warner Bros shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) data indicates a slight decline in revenue growth at -1.50%, which is concerning. However, the company has managed to maintain a positive net profit margin of 1.99% and a gross profit margin of 43.27%, indicating some level of profitability. The EBIT and EBITDA margins are also positive at 8.85% and 59.74%, respectively, showing operational efficiency. Despite these strengths, the negative revenue growth trend and past losses highlight potential risks.65
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.96, which is reasonable for the industry. The return on equity (ROE) is low at 2.21%, indicating limited profitability from equity. The equity ratio stands at 35.83%, suggesting a balanced capital structure. While the company has managed to reduce its debt levels, the low ROE and past negative equity returns are areas of concern.60
Neutral
Cash Flow
Warner Bros demonstrates strong cash flow management with a free cash flow to net income ratio of 79.74% and a positive free cash flow growth rate of 12.3% in the TTM period. The operating cash flow to net income ratio is 39.10%, indicating good cash generation relative to net income. These metrics suggest robust cash flow health, although the company should aim to improve its operating cash flow coverage ratio for better financial flexibility.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 37.86B | 39.32B | 41.32B | 33.82B | 12.19B | 10.67B |
| Gross Profit | 16.67B | 16.35B | 16.80B | 13.38B | 7.57B | 6.81B |
| EBITDA | 19.55B | 11.61B | 22.37B | 14.17B | 7.15B | 6.69B |
| Net Income | 485.00M | -11.31B | -3.13B | -7.37B | 1.01B | 1.22B |
Balance Sheet | ||||||
| Total Assets | 100.52B | 104.56B | 122.76B | 134.00B | 34.43B | 34.09B |
| Cash, Cash Equivalents and Short-Term Investments | 4.33B | 5.31B | 3.78B | 3.73B | 3.90B | 2.09B |
| Total Debt | 33.75B | 39.51B | 43.67B | 49.00B | 14.76B | 15.40B |
| Total Liabilities | 63.21B | 69.62B | 76.28B | 85.33B | 21.03B | 21.70B |
| Stockholders Equity | 36.02B | 34.04B | 45.23B | 47.09B | 11.60B | 10.46B |
Cash Flow | ||||||
| Free Cash Flow | 4.13B | 4.43B | 6.16B | 3.32B | 2.42B | 2.34B |
| Operating Cash Flow | 5.23B | 5.38B | 7.48B | 4.30B | 2.80B | 2.74B |
| Investing Cash Flow | -755.00M | -349.00M | -1.26B | 3.52B | -56.00M | -703.00M |
| Financing Cash Flow | -3.72B | -3.75B | -5.84B | -7.74B | -853.00M | -1.55B |
Warner Bros Technical Analysis
Positive
28.90
Price Trends
28.38
Positive
25.21
Positive
18.80
Positive
Market Momentum
0.29
Negative
60.09
Neutral
87.50
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBD, the sentiment is Positive. The current price of 28.9 is above the 20-day moving average (MA) of 27.99, above the 50-day MA of 28.38, and above the 200-day MA of 18.80, indicating a bullish trend. The MACD of 0.29 indicates Negative momentum. The RSI at 60.09 is Neutral, neither overbought nor oversold. The STOCH value of 87.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBD.
Warner Bros Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $22.80B | 12.38 | 16.87% | 0.85% | 14.91% | 9.30% | |
69 Neutral | $187.87B | 15.62 | 11.65% | 1.10% | 3.61% | 152.34% | |
69 Neutral | $329.50B | 32.73 | 42.76% | ― | 15.49% | 35.54% | |
68 Neutral | $22.80B | 13.47 | 16.87% | 0.75% | 14.91% | 9.30% | |
68 Neutral | $72.29B | 154.05 | 1.36% | ― | -4.29% | ― | |
66 Neutral | $13.40B | 30.13 | 5.18% | 0.76% | -16.36% | 29.53% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% |
* Communication Services Sector Average
WBD
Warner Bros
28.90
17.90
162.73%
NWSA
News Corp
23.58
-4.28
-15.36%
DIS
Walt Disney
105.05
-5.04
-4.58%
NFLX
Netflix
82.70
-13.61
-14.13%
FOXA
Fox
54.12
-1.76
-3.15%
FOX
Fox
49.62
-2.74
-5.23%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.