The Walt Disney Company (NYSE: DIS) Q1 2025 results not only revealed strong revenue and profit growth, surpassing analysts’ forecasts, but also a decline of 700,000 Disney+ subscribers. Consequently, the stock initially rose following the report’s release but ended the session down 2.5%.
This article explores The Walt Disney Company and its business model, offering a fundamental analysis of Disney’s financial report. It also includes a technical analysis of Walt Disney’s stock, evaluating its current performance as the basis for a DIS stock forecast for December 2024 and throughout 2025.
About The Walt Disney Company
The Walt Disney Company is one of the world’s largest media and entertainment corporations, founded on 16 October 1923 by brothers Walter and Roy Disney. The company is renowned for its live-action films and animated cartoons, including iconic creations such as ‘Snow White and the Seven Dwarfs’. Its portfolio includes Lucasfilm, Marvel Studios, Pixar, and 20th Century Studios. In addition to film production, Disney operates theme parks and resorts worldwide – Disney World and Disneyland – and broadcasts television through ABC, ESPN, and National Geographic. In 2019, the company launched the Disney+ streaming service. Another key business area is producing and licensing merchandise related to its popular franchises. Disney went public on the New York Stock Exchange on 12 November 1957, trading under the DIS ticker.
The Walt Disney Company’s main financial flows
Walt Disney’s revenue is derived from several key sources, spanning a wide range of entertainment and media operations. Disney’s key revenue-generating segments are outlined below:
- Media Networks: television channels and cable networks (ABC, Disney Channel, ESPN, FX, National Geographic, and others). Revenue streams include advertising, licence fees, paid subscriptions, and the sale of broadcasting rights
- Subscriptions and International Operations: streaming services (Disney+, ESPN+, and Hulu) and international trade. The main sources of income are subscriptions to streaming platforms and the sale of content and licences in foreign markets
- Parks, Experiences, and Consumer Products: theme parks, resorts, cruises, and hotels. Revenue is generated through ticket sales, holiday packages, souvenirs, licensed toys, and other goods and services
- Studio Entertainment: film production and distribution, home video sales, and music publishing. Revenue comes from cinema distribution, the sale of digital and physical content, and proceeds from music soundtrack and licensing
In its financial reports, Disney categorises all revenue into three key segments:
- Entertainment: film production, TV programming, cinema distribution, content sales and licensing, soundtrack releases, and Broadway productions.
- Sports: operations related to the ESPN brand, including cable and digital sports broadcasts, broadcasting rights for sports events, the ESPN+ streaming platform, advertising, content licensing, and sports analytical programs and events.
- Experiences: theme parks (Disneyland, Disney World, and international parks), cruises (Disney Cruise Line), resorts and hotels, attractions, as well as events and client engagement activities related to the Disney brand (interactive shows and VIP tours).
The Walt Disney Company’s strengths and weaknesses
Walt Disney’s strengths:
- Popular brand and recognition: Disney is one of the most well-known companies in the world
- Unique intellectual property: the Marvel, Pixar, and Star Wars franchises, classic animated characters, and original content
- Diversified business: Disney generates revenue across multiple segments, including media, streaming, merchandise, and films
- Global presence: theme parks, films, and media cater not only to the US but also to international markets
- Business integration: comprehensive integration across its businesses enables the company to leverage its assets as effectively as possible, with films and shows serving as the basis for themed attractions, merchandise, and licensing
Weaknesses of Walt Disney’s business:
- Reliance on flagship Marvel and Star Wars franchises: failures to release content could negatively impact Disney’s revenue
- Dependence on economic conditions: theme parks and resorts, which are significant revenue streams, are highly sensitive to economic conditions, tourism trends, and global events (for example, the COVID-19 pandemic)
- High streaming costs: Disney+ incurs substantial content costs and faces intense competition, which increases the financial burden on the company’s expenditure budget
- Slow adaptation to audience preferences: Disney faces challenges in promptly responding to changing preferences. Its large-scale structure delays decision-making, and frequent criticism of the company’s cultural and social policies poses serious reputational risks
Disney’s key competitors are Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Comcast Corporation (NASDAQ: CMCSA), NBCUniversal, Netflix, Inc. (NASDAQ: NFLX), Paramount Global (NASDAQ: PARA), Sony Pictures, and Warner Bros. Discovery, Inc. (NYSE: WBD). Each company holds a leadership position in specific business areas (for example, Netflix in streaming, Universal Studios in theme parks, and Warner Bros. Discovery in film and television content production). However, the combined strengths of Disney’s diverse business segments, scale, and powerful brand give it significant advantages over its competitors.
The Walt Disney Company Q4 2024 report
On 14 November, The Walt Disney Company released its report for Q4 fiscal 2024, which ended on 28 September. Key report data is outlined below:
- Revenue: 22.57 billion USD (+6%)
- Net income: 0.95 billion USD (-6%)
- Earnings per Share: 1.14 USD (+39%)
- Operating profit: 3.65 billion USD (+23%)
Revenue by segment:
- Entertainment: 10.83 billion USD (+14%)
- Sports: 3.91 billion USD (unchanged)
- Experiences: 8.24 billion USD (+1%)
Segment operating income:
- Entertainment: 1.07 billion USD (+353%)
- Sports: 0.92 billion USD (-5%)
- Experiences: 1.66 billion USD (+6%)
All indicators (except net income) showed growth. The company’s management attributed the decline in net income to increased spending on content production and marketing, as well as higher costs for developing streaming services (Disney+, Hulu).
The company projected continued growth in its key financial indicators in 2025 but predicts a potential decline in the number of new Disney+ subscribers in Q1 2025 compared to Q4 2024.
Disney plans a share buyback program worth 3.00 billion USD and dividend distribution this year. Dividends will increase by 33%, rising to 0.50 USD per share, and be paid in two instalments in January and July 2025.
In 2026, Walt Disney predicted a slower percentage growth rate in the Sports segment, with significant single-digit growth in the Experiences segment and double-digit growth in the Entertainment sector.
Based on the company’s 2025-2026 forecasts, key financial indicators were expected to rise further, which should positively impact dividend payouts and the share buyback program, ultimately leading to an increase in the stock price.
The Walt Disney Company Q1 2025 report
On 5 February, The Walt Disney Company released its report for Q1 fiscal 2025, which ended on 28 December 2024. Below are its key highlights:
- Revenue: 24.69 billion USD (+6%)
- Net income: 3.66 billion USD (+27%)
- Earnings per Share: 1.76 USD (+44%)
- Operating profit: 5.06 billion USD (+31%)
Revenue by segment:
- Entertainment: 10.87 billion USD (+9%)
- Sports: 4.85 billion USD (unchanged)
- Experiences: 9.41 billion USD (+3%)
Segment operating income:
- Entertainment: 1.70 billion USD (+95%)
- Sports: 247 million USD (vs a loss of 103 million USD)
- Experiences: 3.11 billion USD (+31%)
CEO Robert Alan Iger emphasised the company’s strong start to the new fiscal year and expressed confidence in its growth strategy. He highlighted significant successes in streaming services, including the integration of ESPN into Disney+ and consistently strong performance in the theme park and resort segment.
For the future, Disney forecasts high-single-digit growth in adjusted EPS compared to 2024. The company also expects the operating income in the streaming segment (Disney+, Hulu, ESPN+) to increase by approximately 875 million USD. In 2025, as previously expected, Disney plans to allocate 3.00 billion USD to share buybacks.
Although The Walt Disney Company exceeded revenue and income forecasts in Q1 2025, its stock edged down by the end of the trading session on the day of the report release. This was primarily driven by a decrease of 700 thousand in Disney+ subscribers, raising concerns among investors about further growth in the streaming sector. Additionally, the company warned that subscriptions could decline further in Q2 due to the recent price increase, reinforcing the negative sentiment in the market.
Expert forecasts for The Walt Disney Company stock for 2025
- Barchart: 20 out of 29 analysts rated Walt Disney stock as Strong Buy, two as Moderate Buy, and seven as Hold, with a high price target of 147 USD
- MarketBeat: 21 out of 27 specialists assigned a Buy rating to the shares, while six gave a Hold recommendation, with a high price target of 147 USD
- TipRanks: 16 out of 21 professionals recommended the stock as a Buy, while five gave a Hold rating, with a high price target of 147 USD
- Stock Analysis: 15 out of 26 experts rated the stock as Strong Buy, six as Buy, and five as Hold, with a high price target of 147 USD
None of the analysts recommend selling Walt Disney shares.
The Walt Disney Company stock price forecast for 2025
Disney’s stock decline began in March 2021 from 200 USD and halted only in October 2023 at 80 USD. The stock had previously dropped to this support level from 150 USD during the peak of the coronavirus crisis when government-imposed lockdowns and border closures severely reduced visits to Disney theme parks. This support level remains a key area for investors, where they are willing to buy the company’s shares. Currently, the stock is trading around 110 USD, with a Triangle pattern likely to form on the chart. Based on The Walt Disney Company’s stock performance, the potential price movements for 2025 are as follows.
The primary scenario for The Walt Disney Company stock outlook suggests a decline to the Triangle’s lower boundary at 90 USD per share, followed by a rebound and rise to the 120 USD resistance level. A breakout above this level could push the price towards 150 USD. This scenario is supported by the company’s weak guidance for the next quarter, with an improvement in financial performance expected only in the second half of 2025.
The alternative scenario for Walt Disney’s stock outlook predicts a breakout above the 120 USD resistance level, increasing to 150 USD. If the stock surpasses this resistance, the price could rise to 170 USD.
The Walt Disney Company stock analysis and forecast for 2025
Risks of investing in The Walt Disney Company stock
Investing in Walt Disney’s shares may be attractive due to its brand’s strength and diversified business model. However, there are certain risks that investors should consider:
- Dependence on consumer spending: Disney highly depends on revenues from entertainment-related sectors (theme parks, films, and streaming services). During economic downturns, consumers typically cut back on non-essential spending, such as entertainment, which negatively affects the company’s income
- Competition in media and streaming: the streaming market is highly saturated and diverse. While Disney+ has growth potential, retaining its current position requires substantial investments in content, which drives up costs. Since the company cannot focus solely on one type of business (unlike Netflix, where streaming is the primary source of revenue), there is a risk that its influence in this market could diminish
- Development costs and debt obligations: Disney invests in new projects, such as theme parks, streaming content, and technology. These investments increase the company’s debt burden. If interest rates rise in the US, refinancing debt would be more expensive, increasing the cost of servicing the debt and negatively impacting Disney’s overall profitability
- Brand and reputation risks: scandals involving the company’s management or products can damage its reputation. Decisions related to the release of films and series perceived as controversial could lead to rejection or even boycotts from certain audience segments
Disney’s shares can offer holders attractive long-term prospects, especially if the streaming business succeeds. However, investors must consider the abovementioned risks and diversify their portfolios accordingly.
Summary
In its Q1 2025 earnings report, The Walt Disney Company demonstrated resilience and strategic progress, reaffirming its status as a leader in the entertainment industry. However, specific challenges remain despite strong performance in key segments such as streaming and theme parks. The decline in Disney+ subscribers suggests potential difficulties in retaining audiences amid rising prices and intense competition. Another challenge stems from macroeconomic factors, including inflation and evolving trends in the tourism sector, which could impact theme park attendance and visitor spending.
However, even under such conditions, Disney has significant potential for success in its core areas. One of the company’s main opportunities lies in improving the profitability of its streaming service. Disney’s focus on price optimisation, bundled offerings (Disney+, Hulu, ESPN), and cost reduction could drive higher margins while retaining a loyal subscriber base. Successful integration of live sports broadcasts into streaming content could further boost audience engagement and attract new users.
Another key growth driver is theme parks and entertainment, a cornerstone of Disney’s business. Investments in new attractions, park expansions, and cruise lines will support long-term growth, particularly as global tourism demand stabilises.
If Disney maintains financial discipline while continuing its investment in content and experiences, the company could achieve sustainable growth, positioning 2025 as a successful year.
Source: Roboforex
