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Warner Bros (WBD)
NASDAQ:WBD
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Warner Bros
(NASDAQ:WBD)
52Neutral
Positive Factors
Strategic Restructuring
WBD announced plans for a strategic restructuring designed to enhance flexibility and unlock shareholder value.
Streaming Business Growth
WBD continues to show healthy growth at its streaming business, with 8% YoY top-line growth and adj. EBITDA likely to exceed the $1.3bn guidance for year.
Subscriber Growth
Warner Bros Discovery reported adding 5.3 million global DTC subscribers, surpassing expectations, indicating strong growth in their direct-to-consumer segment.
Negative Factors
Financial Leverage
Elevated debt leverage remains an impediment, in analyst's view.
Market Conditions
Analyst's recommendation remains neutral due to a challenged advertising environment, elevated domestic video subscriber declines, evolving direct-to-consumer marketplace, increased investments, and leverage.
Studios Performance
Studios revenue and EBITDA were below expectations due to lower theatrical revenue and a decline in games, indicating challenges in this area.
Warner Bros (WBD) vs. S&P 500 (SPY)
Market Cap
$20.85B
Dividend YieldN/A
Average Volume (3M)44.23M
Price to Earnings (P/E)―
Beta (1Y)1.23
Revenue Growth-5.58%
EPS Growth-254.85%
CountryUS
Employees35,000
SectorCommunication Services
Sector Strength82
IndustryEntertainment
Share Statistics
EPS (TTM)-0.18
Shares Outstanding2,473,835,700
10 Day Avg. Volume37,822,069
30 Day Avg. Volume44,234,798
Financial Highlights & Ratios
PEG Ratio2.97
Price to Book (P/B)0.65
Price to Sales (P/S)0.00
P/FCF Ratio4.70
Enterprise Value/Market Cap2.72
Enterprise Value/Revenue0.36
Enterprise Value/Gross Profit3.46
Enterprise Value/Ebitda-26.32
Forecast
1Y Price Target
$12.47Price Target Upside37.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
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 makes money through multiple revenue streams, primarily driven by its film and television production and distribution activities. The company generates significant revenue from box office sales, home entertainment, and digital distribution of films. Its television segment contributes through network broadcasting, cable subscriptions, and syndication of television series. Additionally, WBD leverages its extensive content library to license films and shows to various platforms, including streaming services. The company's own streaming platforms, such as HBO Max, provide a growing source of subscription revenue. Merchandise licensing and sales related to its popular franchises also contribute to its earnings. Strategic partnerships, advertising sales, and international operations further enhance Warner Bros. Discovery's revenue potential.
Warner Bros Financial Statement Overview
Summary
Warner Bros faces significant profitability challenges with negative net income and declining revenue. Operational efficiencies are seen in a stable gross profit margin, but high operating expenses persist. The balance sheet shows improved leverage, though ROE remains negative. Cash flow generation is positive, supporting operations despite financial difficulties.Income Statement
Warner Bros experienced a decline in revenue from 2023 to 2024, with a negative revenue growth rate of -4.84%. The company has been struggling with profitability as evidenced by negative EBIT and EBITDA margins. Net income has also been negative, leading to a challenging net profit margin. Despite this, gross profit margin remains positive, indicating some operational efficiencies.45
Neutral
Balance Sheet
The company has a moderate equity ratio of 32.54% in 2024, reflecting a balanced capital structure. However, the debt-to-equity ratio has significantly improved from 2023 to 2024, indicating reduced leverage. Return on equity is negative, reflecting the impact of negative net income on shareholder returns.50
Neutral
Cash Flow
Warner Bros has managed to maintain a positive operating cash flow to net income ratio, indicating effective cash generation despite reported losses. Free cash flow remains positive, but has decreased from the previous year. The cash flow stability supports ongoing operations and investment activities, though growth in free cash flow is limited.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 39.32B | 41.32B | 33.82B | 12.19B | 10.67B | Gross Profit |
| 16.35B | 16.80B | 13.38B | 7.57B | 6.81B | EBIT |
| -10.03B | -1.55B | -3.58B | 2.01B | 2.52B | EBITDA |
| -6.37B | 6.38B | 41.00M | 3.65B | 3.78B | Net Income Common Stockholders |
| -11.31B | -3.13B | -7.30B | 1.01B | 1.22B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 5.31B | 3.78B | 3.73B | 3.90B | 2.09B | Total Assets |
| 104.56B | 122.76B | 134.00B | 34.43B | 34.09B | Total Debt |
| 39.51B | 47.28B | 49.00B | 14.76B | 15.40B | Net Debt |
| 34.19B | 42.97B | 45.27B | 10.85B | 13.31B | Total Liabilities |
| 69.62B | 76.28B | 85.33B | 21.03B | 21.70B | Stockholders Equity |
| 34.04B | 45.23B | 47.09B | 11.60B | 10.46B |
| Cash Flow | Free Cash Flow | |||
| 4.43B | 6.16B | 3.32B | 2.42B | 2.34B | Operating Cash Flow |
| 5.38B | 7.48B | 4.30B | 2.80B | 2.74B | Investing Cash Flow |
| -349.00M | -1.26B | 3.52B | -56.00M | -703.00M | Financing Cash Flow |
| -3.75B | -5.84B | -7.74B | -853.00M | -1.55B |
Warner Bros Technical Analysis
Neutral
9.07
Price Trends
9.52
Negative
9.97
Negative
9.19
Negative
Market Momentum
-0.14
Negative
53.97
Neutral
72.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBD, the sentiment is Neutral. The current price of 9.07 is above the 20-day moving average (MA) of 8.41, below the 50-day MA of 9.52, and below the 200-day MA of 9.19, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 53.97 is Neutral, neither overbought nor oversold. The STOCH value of 72.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WBD.
Warner Bros Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $166.62B | 29.91 | 8.75% | 0.90% | 5.33% | 431.28% | |
80 Outperform | $21.62B | 10.54 | 20.09% | 1.07% | 4.29% | 177.70% | |
80 Outperform | $21.62B | 9.80 | 20.09% | 1.16% | 4.29% | 177.70% | |
75 Outperform | $484.17B | 53.76 | 40.84% | ― | 14.11% | 47.22% | |
63 Neutral | $15.92B | 31.07 | 89.20% | 2.60% | -0.91% | -14.87% | |
60 Neutral | $13.44B | 7.03 | -2.73% | 3.78% | 2.17% | -39.43% | |
52 Neutral | $20.85B | ― | -27.69% | ― | -5.58% | -254.85% |
* Communication Services Sector Average
Performance Comparison
WBD
Warner Bros
9.07
0.69
8.23%
DIS
Walt Disney
105.94
1.06
1.01%
NFLX
Netflix
1,140.22
523.63
84.92%
FOXA
Fox
50.24
17.44
53.17%
FOX
Fox
46.72
16.36
53.89%
WMG
Warner Music Group
27.36
-4.18
-13.25%
Warner Bros Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 5.96%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in subscriber growth and streaming EBITDA. The company's focus on quality content and international expansion are driving positive results, despite some challenges in the U.S. market and increased costs related to sports rights. Overall, the positive highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Strong Subscriber Growth
Over the last 12 months, the company gained more than 22 million subscribers, with over 5 million added in the first quarter alone.
Streaming EBITDA Surge
Warner Bros. Discovery delivered $339 million in EBITDA from streaming, on track to achieve $1.3 billion in 2025, marking an 85% increase versus 2024.
Successful Content Strategy
The focus on quality content with hits like 'The White Lotus' and 'The Last of Us' is cited as a key driver of subscriber growth and engagement.
International Growth
The company is seeing net growth internationally, with streaming and ad-light products outrunning traditional business declines, especially in Europe.
Strong Studio Performance
Progress towards a $3 billion EBITDA goal for the studio segment, with successful releases like 'Minecraft Movie' and 'Sinners.'
Negative Updates
Challenges in U.S. Market
Despite international growth, the U.S. market has not yet achieved net growth when considering traditional business declines.
Impact of Sports Rights Costs
2025 will see a $300 million increase in costs due to overlap in outgoing and incoming sports rights.
Company Guidance
During Warner Bros. Discovery's First Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance for the future. The company reported gaining over 22 million subscribers in the last 12 months, with an addition of more than 5 million subscribers in the first quarter, contributing to an EBITDA of $339 million. Warner Bros. Discovery is on track to deliver at least $1.3 billion of EBITDA in 2025, representing an 85% increase compared to 2024. The company aims to surpass its 150 million subscriber goal by the end of next year. The growth is fueled by a robust storytelling pipeline from HBO, local language content, and local sports, which enhance their global relevance. Additionally, the company is making strides in the studio segment, with a target to return to $3 billion in EBITDA, driven by successful content from Warner Bros. Television and Motion Pictures. The strategic plan includes a 10-year roadmap to revitalize the DC brand globally, starting with new releases such as Superman in July. The company is also focusing on bundling strategies to enhance consumer experience and drive long-term sustainable growth and shareholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.