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what it is
Warner Bros. Discovery makes movies, TV, streaming, and games, then tries to squeeze cash from all of them at once.
how it gets paid
Last year Warner Bros. Disc made $37.3B in revenue. linear networks was the main engine at $18.6B, or 50% of sales.
why growth slowed
Revenue fell 5.1% last year. Given the likelihood of near-term headwinds, even venturesome investors should probably wait until the dust settles here.
what just happened
WBD posted Revenue of $27.8B but last earnings still missed consensus on EPS.
At a glance
B+ balance sheet — decent shape, but not bulletproof
81.1x trailing p/e — you're paying up for this one
4.5% return on capital — nothing to write home about
$0.30 fy2026 eps est
$41B fy2028 rev est
xvary composite: 55/100 — below average
What they do
Warner Bros. Discovery makes movies, TV, streaming, and games, then tries to squeeze cash from all of them at once.
You already know the brands: HBO, DC, Harry Potter, CNN, HGTV, and TNT. That matters because your time follows franchises, and WBD owns decades of them. The company did $37.3B in annual revenue, which means the library still pulls a crowd even while the business only posted a 2.0% operating margin (operating margin → profit after running the business → so what: huge scale is producing thin profits).
How they make money
$37.3B
annual revenue · their business grew -5.1% last year
linear networks
$18.6B
8.0%
streaming
$10.3B
+9.0%
film and television studios
$6.8B
6.0%
games and licensing
$1.6B
+4.0%
The products that matter
streaming subscription platform
Max
$7.5B · +3% growth
this $7.5B segment grew 3%, and management is targeting 140M+ subscribers by Q1 2026. if streaming cannot scale from here, the standalone case gets thin fast.
140M+ target
film and tv production
Studios
$14.9B · -4%
it's a $14.9B segment built around franchises like DC and Harry Potter. hit-driven businesses can throw off licensing cash, but this one still shrank 4%.
franchise IP
cable tv channels
Global Linear Networks
$14.9B · -8%
this $14.9B segment still matters because declining cable cash flow funds the rest of the company. the problem is it fell 8%, which tells you the ice cube is still melting.
cash flow, declining
Key numbers
81.1x
trailing p/e
P/E → price versus profit → so what: you are paying 81.1 times trailing earnings for a company with only a 4.5% return on capital.
$41B
2028 revenue est.
Revenue estimate → future sales guess → so what: $41B is only about 9.9% above today's $37.3B, which is modest growth for this valuation.
2.0%
operating margin
Operating margin → money left after running the business → so what: WBD keeps just $2 on every $100 of sales before interest and taxes.
$33.4B
long-term debt
Long-term debt → money owed for years → so what: the debt stack is almost as large as one full year of revenue at $37.3B.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 10 / 100
- long-term debt $33.4B (32% of capital)
- net profit margin 4.6% — keeps 5 cents of every dollar in revenue
- return on equity 5% — $0.05 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in WBD 3 years ago → it's now worth $21,600.
The index would have given you $14,770.
source: institutional data · total return
What just happened
missed estimates
WBD posted Revenue of $27.8B but last earnings still missed consensus on EPS.
Latest-quarter revenue rose 208% vs. prior year to $27.8B and EPS hit $0.39, but the last reported earnings result was -$0.10 versus a -$0.04 estimate, a 150% miss. Deadpan fact bomb: revenue can triple and investors still focus on the nickel you missed by.
$9.7B
revenue
$0.39
eps
44.0%
gross margin
the number that mattered
The number that mattered was the -150% EPS surprise, because a company at 81.1x trailing earnings does not get graded on effort.
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there has been no shortage of drama surrounding warner bros.
-
discovery’s future.since our late october review, the company announced that it was planning to sell its streaming and studios assets to netflix (following the separation of discovery global) for a total enterprise value of $82.7 billion. however, paramount skydance continued to pursue wbd quite aggressively with a rival all-cash hostile takeover bid in early december of about $108 billion ($30 a share) for the entire company. now there is talk of a brewing proxy fight and paramount skydance has filed a lawsuit against warner bros. in an attempt to derail the netflix deal, which was unanimously approved by wbd’s board. the latter’s leadership contends that its deal with netflix is less risky, given paramount skydance’s hefty debt load. it is unclear how this story will unfold, but the stock is presently hovering closer to the proposed netflix acquisition price of $27.75 a share. operationally, the company is on track to deliver its first profitable year as a publicly traded business. although the third quarter was a bit rocky (loss of $0.06 a share versus earnings of $0.05 the previous year), we expect comparisons were favorable in the recent december stanza. streaming subscriber growth has been impressive, boosting the segment’s profitability, while the studios business saw higher theatrical and licensing revenues from successful film releases.
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these gains helped offset weakness in global linear networks, where declines in domestic pay tv and advertising weighed on results.although overall revenues were down compared to last year, the december quarter was likely solid, supported by holiday box office strength, continued international expansion of hbo max, and seasonal advertising demand. although we expect more steady and predictable revenue and earnings growth out to late decade, the fight for control of the company creates a great deal of uncertainty.
-
the outlook rank has been suspended due to the pending acquisition.given the likelihood of near-term headwinds, even venturesome investors should probably wait until the dust settles here.
source: company earnings report, 2026
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What could go wrong
the #1 risk is the takeover process breaking before the operating turnaround is strong enough to stand on its own.
high
contested M&A outcome
The board approved a Netflix asset deal at $82.7B enterprise value, while Paramount Skydance pursued a $108B all-cash hostile bid for the whole company at about $30 a share. Lawsuits and proxy-fight talk mean the obvious catalyst is also the biggest source of uncertainty.
If the deal premium fades, the stock has to trade on standalone fundamentals again.
high
leverage still limits the options
Long-term debt is $33.4B, and net debt was $29B at the last update. That is manageable if cash flow improves. It is a problem again if free cash flow keeps falling.
Debt touches everything here — deal terms, buyback capacity, and how much patience the market gives management.
med
linear networks are still shrinking
Global Linear Networks generated $14.9B of revenue, but that was down 8%. This segment is still a major source of cash, which means decline in cable is not background noise — it is the financing source weakening in real time.
A faster melt in linear TV would force streaming and studios to carry more of the company before they are ready.
med
profitability is still too thin
Operating margin is 3.7%, net profit margin is 4.6%, return on capital is 4.5%, and the latest EPS print was -$0.10 versus a $0.03 expectation. Those are not numbers that buy you much forgiveness.
Small disappointments can create large stock moves when earnings are still this fragile.
If the $30 a share bid does not materialize, you are left valuing a $41B revenue company with a 3.7% operating margin, $29B net debt, and legacy segments still shrinking.
source: institutional data · regulatory filings · risk analysis
Pay attention to
M&A
deal resolution matters more than a normal earnings beat
The spread between the approved Netflix asset plan and Paramount Skydance's $30 a share hostile bid is now the main driver of sentiment. Until that clears, the stock will trade like an event contract with movie rights attached.
streaming
the 140M+ subscriber target for Q1 2026
Management's target is over 140 million streaming subscribers. If that milestone slips, it gets harder to argue Max deserves a rich standalone valuation.
calendar
next earnings report
Scheduled for May 06, 2026. Beyond the headline EPS, watch whether free cash flow and net debt improve from the current $29B net debt level.
legacy trend
whether linear decline keeps outrunning streaming growth
Linear networks fell 8% while DTC grew 3%. If that spread stays wide, the turnaround math keeps moving away from management.
Analyst rankings
short-term outlook
suspended
coverage is effectively on pause because the pending acquisition distorts the normal ranking model. in human-speak: the deal process matters more than the spreadsheet right now.
risk rank
3
middle-of-the-pack risk profile. not a bunker stock, not a total lottery ticket, but the corporate-action overlay makes it feel hotter than that.
price stability
10 / 100
the stock has been highly volatile. if you own this name, you should expect the chart to react to headlines before fundamentals.
source: institutional data
Institutional activity
institutions have been net selling for 3 consecutive quarters — 516 buyers vs. 539 sellers in 3q2025. total institutional holdings: 1.7B shares. net selling for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$9
$39
$28
current price
$24
target midpoint · 15% from current · 3-5yr high: $39
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