Warner Bros (WBD) AI Stock Analysis

• Market Cap: $52.36B
• Dividend Yield: N/A
• Average Volume (3M): 44.32M
• Price to Earnings (P/E): 69.7
• Beta (1Y): 1.47
• Revenue Growth: -3.79%
• EPS Growth: N/A
• Country: US
• Employees: 35,000
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 0.63
• Shares Outstanding: 2,475,772,200
• 10 Day Avg. Volume: 30,720,980
• 30 Day Avg. Volume: 44,317,995
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.14
• Enterprise Value/Revenue: 1.55
• Enterprise Value/Gross Profit: 3.59
• Enterprise Value/Ebitda: 2.60
• 1Y Price Target: $19.79
• Price Target Upside: -5.94% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 69 Neutral
• Price Target: $23.00 ▲(9.32% Upside)

Warner Bros. Discovery's stock is supported by strong technical momentum and positive earnings call highlights, including subscriber growth and box office success. However, high valuation metrics and operational challenges, such as negative EBIT margin and declining free cash flow, temper the overall score. The company is on a positive trajectory but must address these issues to sustain growth.

Positive Factors

Subscriber Growth

The increase in subscribers for HBO Max indicates strong demand for Warner Bros.' streaming services, enhancing long-term revenue potential and market presence in the competitive streaming industry.

Debt Reduction

Improved leverage ratios enhance financial flexibility and reduce risk, allowing Warner Bros. to invest in growth opportunities and withstand economic fluctuations more effectively.

Strategic Review

The strategic review could unlock shareholder value through potential sales or restructuring, positioning the company to better capitalize on its assets and adapt to industry changes.

Negative Factors

Negative EBIT Margin

A negative EBIT margin indicates operational inefficiencies that could hinder profitability and growth, requiring management to address cost structures and revenue strategies.

Declining Free Cash Flow

Decreasing free cash flow limits Warner Bros.' ability to fund new projects, pay down debt, or return capital to shareholders, potentially impacting long-term financial health.

Content Licensing Strategy Pressure

Changes in content licensing strategy could affect revenue stability and growth, necessitating adjustments to maintain competitive advantage and financial performance.

Warner Bros Business Overview & Revenue Model

Company Description

Warner Bros. Discovery (WBD) is a leading global media and entertainment company that operates through various segments including film, television, and streaming services. Formed from the merger of WarnerMedia and Discovery, Inc., WBD encompasses a vast library of intellectual properties, including iconic franchises like Harry Potter, DC Comics, and various reality TV shows. The company produces and distributes films, television programs, and digital content across multiple platforms, aiming to engage audiences worldwide with diverse storytelling and entertainment experiences.

How the Company Makes Money

Warner Bros. Discovery generates revenue through multiple streams, primarily from content creation and distribution. Key revenue sources include theatrical releases, television licensing, subscription fees from its streaming services such as HBO Max, and advertising revenue from its cable networks and digital platforms. The company also earns income from merchandise sales related to its franchises, as well as from partnerships with other media entities. Significant partnerships, such as those with cable providers and international distributors, enhance its reach and profitability. Additionally, the diversification into non-scripted content and reality TV has proven to be a lucrative avenue, capitalizing on changing viewer preferences.

Warner Bros Financial Statement Overview

Summary

Warner Bros demonstrates a solid recovery in revenue and profitability in the TTM, with improved margins and a balanced leverage position. However, operational challenges persist, as indicated by the negative EBIT margin. The cash flow situation is stable but shows signs of stress with declining free cash flow. Overall, the company is on a positive trajectory but must address operational inefficiencies and cash flow concerns to sustain growth.

Income Statement

Warner Bros shows a strong recovery in its TTM (Trailing-Twelve-Months) with a significant revenue growth rate of 26.3% and a positive net profit margin of 6.17%. The gross profit margin has improved to 52.74%, indicating efficient cost management. However, the EBIT margin remains negative, suggesting ongoing operational challenges. The EBITDA margin is healthy at 36.67%, reflecting strong earnings before interest, taxes, depreciation, and amortization.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.96 in the TTM, indicating a balanced leverage position. Return on equity is positive at 6.82%, showing profitability for shareholders. The equity ratio stands at 35.44%, suggesting a stable capital structure. However, the company has experienced fluctuations in equity and debt levels over the years, which could pose risks.

Cash Flow

Operating cash flow is strong, but free cash flow has declined by 6.32% in the TTM. The operating cash flow to net income ratio is 0.41, indicating decent cash generation relative to net income. The free cash flow to net income ratio is 0.77, showing a good conversion of earnings to cash. However, the negative growth in free cash flow is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	38.44B	39.32B	41.32B	33.82B	12.19B	10.67B
Gross Profit	16.64B	16.35B	16.80B	13.38B	7.57B	6.81B
EBITDA	22.96B	11.61B	22.37B	14.17B	7.15B	6.69B
Net Income	768.00M	-11.31B	-3.13B	-7.37B	1.01B	1.22B
Balance Sheet
Total Assets	101.73B	104.56B	122.76B	134.00B	34.43B	34.09B
Cash, Cash Equivalents and Short-Term Investments	4.89B	5.31B	3.78B	3.73B	3.90B	2.09B
Total Debt	34.63B	39.51B	43.67B	49.00B	14.76B	15.40B
Total Liabilities	64.38B	69.62B	76.28B	85.33B	21.03B	21.70B
Stockholders Equity	36.05B	34.04B	45.23B	47.09B	11.60B	10.46B
Cash Flow
Free Cash Flow	4.07B	4.43B	6.16B	3.32B	2.42B	2.34B
Operating Cash Flow	5.10B	5.38B	7.48B	4.30B	2.80B	2.74B
Investing Cash Flow	-643.00M	-349.00M	-1.26B	3.52B	-56.00M	-703.00M
Financing Cash Flow	-3.36B	-3.75B	-5.84B	-7.74B	-853.00M	-1.55B

Warner Bros Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: 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 21.04 is above the 20-day moving average (MA) of 19.04, above the 50-day MA of 16.59, and above the 200-day MA of 11.93, indicating a bullish trend. The MACD of 1.02 indicates Negative momentum. The RSI at 70.65 is Negative, neither overbought nor oversold. The STOCH value of 89.31 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DIS	―	$200.79B	17.51	11.01%	0.89%	5.00%	144.65%
FOX	―	$24.96B	10.78	19.96%	1.00%	16.60%	57.39%
FOXA	―	$24.96B	12.10	19.96%	0.90%	16.60%	57.39%
NFLX	―	$463.86B	45.73	42.86%	―	15.49%	35.53%
WBD	―	$52.36B	69.67	2.18%	―	-3.79%	―
NWSA	―	$15.58B	32.33	5.69%	0.75%	-11.42%	75.42%
Sector *	―	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Warner Bros Corporate Events

Warner Bros. Discovery Reports Q2 2025 Earnings

Warner Bros. Discovery, Inc. is a global media and entertainment company that creates and distributes a diverse portfolio of branded content across television, film, streaming, and gaming. The company is known for its iconic brands such as HBO, CNN, and Warner Bros. Pictures.

Warner Bros. Discovery’s Earnings Call Highlights Success and Challenges

Warner Bros. Discovery’s recent earnings call painted a picture of both triumphs and challenges. The company celebrated strong box office performance, subscriber growth, and a strategic focus on franchises, all while achieving significant debt reduction and Emmy success. However, it also acknowledged short-term financial pressures from content strategy changes, a dampened growth period due to distribution deal restructuring, and the impact of NBA rights costs.