The Walt Disney Co (DIS, Financial) recently reported a daily loss of 2.39%, contributing to a 3-month decline of 8.71%. Despite these figures, the company maintains an Earnings Per Share (EPS) of 0.92. This analysis seeks to determine if The Walt Disney Co is fairly valued at its current market price.
Company Overview
The Walt Disney Co operates across three primary business segments: entertainment, sports, and experiences, leveraging a century's worth of iconic franchises and characters. Its entertainment division encompasses the ABC broadcast network, several cable networks, and leading streaming services Disney+ and Hulu. The sports segment includes ESPN and the ESPN+ streaming service, while the experiences segment covers theme parks and vacation destinations worldwide. With a current stock price of $102.84 and a market cap of $187.50 billion, we compare this against the GF Value to gauge the stock's intrinsic worth.
Understanding GF Value
The GF Value is a unique measure that estimates the true value of a stock based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. For The Walt Disney Co, the GF Value is set at $112.88, suggesting that the stock is fairly valued at its current price of $102.84. This valuation is crucial as it indicates that the stock price should gravitate around this value, assuming market conditions do not change drastically.
Financial Strength and Risk
Investing in a company with robust financial health reduces the risk of permanent capital loss. The Walt Disney Co's cash-to-debt ratio of 0.14, though lower than 82.56% of its peers, together with its fair financial strength rating of 5 out of 10 by GuruFocus, suggests a moderate risk profile. It's crucial for investors to consider these metrics before making investment decisions.
Profitability and Growth Prospects
Consistent profitability is a key indicator of a company's investment quality. The Walt Disney Co has demonstrated strong performance with an operating margin of 11.82%, ranking better than 77.24% of its industry peers. The company's 3-year average revenue growth rate stands at 10.3%, highlighting its capacity to expand effectively. These figures underscore the company's ability to generate profit and sustain growth, making it an attractive option for value investors.
Conclusion
Considering The Walt Disney Co's current market valuation relative to its GF Value, the stock appears fairly priced. The company's solid financial health, combined with its ability to maintain profitability and achieve growth, presents a balanced investment profile. For a deeper understanding of The Walt Disney Co's financials and to explore potential investment opportunities, visit The Walt Disney Co's 30-Year Financials.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
