In an era where entertainment shapes cultural landscapes, Warner Bros. Discovery, Inc. stands at the forefront, crafting narratives that resonate with audiences worldwide. With its diverse portfolio spanning blockbuster films, hit television series, and innovative streaming services, the company has revolutionized how we consume content. Known for its commitment to quality and creativity, Warner Bros. Discovery continues to push boundaries. As I evaluate its current market position, I must consider whether its robust fundamentals still align with the soaring expectations reflected in its valuation.
Table of contents
Company Description
Warner Bros. Discovery, Inc. is a prominent player in the global media and entertainment industry, founded in 2008 and headquartered in New York City. The company operates across three key segments: Studios, Network, and Direct-to-Consumer (DTC). Warner Bros. produces and releases feature films, licenses television programs, and offers streaming services through its renowned brands, including HBO, CNN, and DC Comics. With a market capitalization of approximately $64.6B and a workforce of 35K employees, the company serves diverse geographic markets and excels in delivering a rich portfolio of content across various platforms. Warner Bros. Discovery is strategically positioned to shape the entertainment landscape through innovation and extensive brand franchises, ensuring a significant presence in the evolving digital ecosystem.
Fundamental Analysis
In this section, I will analyze Warner Bros. Discovery, Inc.’s income statement, financial ratios, and dividend payout policy to provide insights into its financial health.
Income Statement
The following table summarizes the income statement for Warner Bros. Discovery, Inc. over the last five fiscal years, providing an overview of key financial metrics.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 10.67B | 12.19B | 33.82B | 41.32B | 39.32B |
| Cost of Revenue | 3.86B | 4.62B | 20.44B | 24.53B | 22.97B |
| Operating Expenses | 4.30B | 5.56B | 20.75B | 18.34B | 26.38B |
| Gross Profit | 6.81B | 7.57B | 13.38B | 16.80B | 16.35B |
| EBITDA | 6.69B | 7.15B | 14.17B | 22.37B | 11.61B |
| EBIT | 2.38B | 2.07B | -7.18B | -1.64B | -9.37B |
| Interest Expense | 0.69B | 0.63B | 1.78B | 2.22B | 2.02B |
| Net Income | 1.22B | 1.01B | -7.37B | -3.13B | -11.31B |
| EPS | 1.82 | 1.55 | -3.82 | -1.28 | -4.62 |
| Filing Date | 2021-02-22 | 2022-02-24 | 2023-02-24 | 2024-02-23 | 2025-02-27 |
Interpretation of Income Statement
Over the past five years, Warner Bros. Discovery, Inc. has seen fluctuations in revenue, peaking in 2023 at 41.32B before falling to 39.32B in 2024. This decrease mirrors a significant decline in net income, which turned negative in 2022 and worsened in 2024, reaching -11.31B. The gross profit margin has remained relatively stable, but operating expenses surged in 2024, impacting EBITDA significantly, which fell to 11.61B. The company’s ability to manage costs and improve margins will be critical moving forward, especially as it navigates this challenging financial landscape.
Financial Ratios
Here is the financial ratios table for Warner Bros. Discovery, Inc. (WBD) over the last few fiscal years.
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 11.42% | 8.25% | -21.80% | -7.57% | -28.77% |
| ROE | 11.65% | 8.67% | -15.65% | -6.91% | -33.23% |
| ROIC | 6.29% | 5.37% | -5.03% | -1.13% | -11.00% |
| P/E | 12.59 | 11.86 | -2.50 | -8.87 | -2.29 |
| P/B | 1.47 | 1.03 | 0.39 | 0.61 | 0.76 |
| Current Ratio | 1.99 | 2.10 | 0.93 | 0.93 | 0.89 |
| Quick Ratio | 1.99 | 2.10 | 0.93 | 0.93 | 0.89 |
| D/E | 1.47 | 1.27 | 1.04 | 0.97 | 1.26 |
| Debt-to-Assets | 45.19% | 42.87% | 36.57% | 35.57% | 41.13% |
| Interest Coverage | 3.63 | 3.18 | -4.15 | -0.70 | -4.97 |
| Asset Turnover | 0.31 | 0.35 | 0.25 | 0.34 | – |
| Fixed Asset Turnover | 8.85 | 9.13 | 6.38 | 6.94 | – |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
Analyzing Warner Bros. Discovery, Inc. (WBD) financial ratios for FY 2024 reveals significant challenges. The liquidity ratios, with a current ratio of 0.89 and quick ratio also at 0.89, indicate potential difficulties in meeting short-term obligations. The solvency ratio of 0.14 suggests heavy reliance on debt, illustrated by a debt-to-equity ratio of 1.26. Profitability appears weak, with a net profit margin of -28.77%, raising concerns about the company’s ability to generate sustainable profits. Efficiency ratios show mixed results; while receivables turnover is relatively high at 6.64, the operating cash flow coverage ratio of 0.12 indicates insufficient cash flow to cover operational costs. Overall, WBD’s financial health appears precarious, necessitating careful monitoring.
Evolution of Financial Ratios
Over the past five years, WBD’s financial ratios have shown a deteriorating trend, particularly in profitability and solvency. The net profit margin has consistently remained negative, and liquidity ratios have decreased, indicating increasing financial strain and operational challenges.
Distribution Policy
Warner Bros. Discovery, Inc. (WBD) currently does not pay dividends, reflecting a strategic focus on reinvestment during a challenging financial period, evidenced by a negative net income and ongoing high growth phase. The absence of dividends allows WBD to prioritize R&D and acquisitions, potentially enhancing long-term shareholder value. Additionally, the company engages in share buybacks, which can support share price stability. However, this approach carries risks, particularly if future profits do not materialize. Overall, the distribution policy appears aligned with a vision for sustainable long-term value creation.
Sector Analysis
Warner Bros. Discovery, Inc. operates in the dynamic entertainment industry, offering a diverse range of media content through its Studios, Networks, and Direct-to-Consumer segments. Its competitive advantages include a strong portfolio of recognized brands and franchises.
Strategic Positioning
Warner Bros. Discovery, Inc. (WBD) holds a significant market share in the entertainment sector, leveraging its diverse portfolio that includes major franchises and streaming services. As of now, the company faces intense competitive pressure from both traditional media giants and emerging digital platforms. Technological disruptions, particularly in streaming and content delivery, are shaping the landscape, compelling WBD to innovate continually. Its recent market cap stands at approximately $64.6B, reflecting its robust positioning amidst these challenges. Careful monitoring of industry trends and consumer preferences will be crucial for sustained growth.
Revenue by Segment
The following pie chart illustrates Warner Bros. Discovery’s revenue distribution by segment for the fiscal year 2024, showcasing the company’s performance across various revenue streams.
In FY 2024, Warner Bros. Discovery generated a total revenue of approximately 43.4B, with Distribution Revenue leading at 19.7B, followed by Content Licensing Contracts at 10.3B. Advertising revenue saw a decline to 8.1B, indicating potential challenges in ad sales, while Service, Other contributed 1.2B. Overall, while Distribution Revenue remains a strong pillar, the drop in Advertising signals a need for strategic adjustments, especially as the industry faces increasing competition and changing consumption patterns. The company must navigate these challenges to sustain growth and mitigate margin risks.
Key Products
Warner Bros. Discovery, Inc. offers a diverse range of products across various segments of the media and entertainment industry. Below is an overview of some of their key products:
| Product | Description |
|---|---|
| HBO Max | A subscription-based streaming service featuring a vast library of films, series, and exclusive content from HBO and other networks. |
| Discovery+ | A streaming service that provides access to a wide range of non-fiction programming from various Discovery networks. |
| Warner Bros. Films | Feature films produced and released by Warner Bros., known for franchises like Harry Potter, DC Comics, and more. |
| CNN | A leading news network that provides 24-hour news coverage, analysis, and original reporting. |
| DC Comics | A major comic book publisher known for iconic characters like Batman, Superman, and Wonder Woman, with adaptations across film and television. |
| Warner Bros. Television | Produces and licenses television programs across multiple genres, including dramas, comedies, and reality shows. |
| Warner Bros. Games | Develops and publishes video games based on popular franchises, enhancing engagement with fans through interactive media. |
| Themed Experiences | Offers immersive experiences and attractions based on popular franchises, enhancing brand engagement and audience interaction. |
These products reflect Warner Bros. Discovery’s commitment to delivering a wide array of entertainment options to consumers globally.
Main Competitors
The competitive landscape for Warner Bros. Discovery, Inc. is comprised of several prominent players in the entertainment and media industry. Below is a table of the main competitors, including Warner Bros. Discovery itself, sorted by descending market cap:
| Company | Market Cap |
|---|---|
| Comcast Corporation | 99.52B |
| América Móvil, S.A.B. de C.V. | 64.71B |
| Warner Bros. Discovery, Inc. | 64.62B |
| Reddit, Inc. | 44.36B |
| Live Nation Entertainment, Inc. | 32.35B |
| Fox Corporation | 30.88B |
| TKO Group Holdings, Inc. | 16.48B |
| Warner Music Group Corp. | 14.91B |
| Liberty Live Group | 7.51B |
These companies primarily operate in the global entertainment sector, competing across various mediums including film, television, and streaming services. Warner Bros. Discovery’s diverse portfolio positions it well within this competitive environment.
Competitive Advantages
Warner Bros. Discovery, Inc. (WBD) holds significant competitive advantages in the entertainment sector through its extensive portfolio of iconic brands and franchises, such as DC, HBO, and Harry Potter. The company’s diverse revenue streams from studios, networks, and direct-to-consumer (DTC) services position it strongly against competitors. Looking ahead, WBD is poised to capitalize on emerging opportunities in streaming and global markets, with plans for new content offerings and innovative distribution methods, further enhancing its market presence and subscriber growth.
SWOT Analysis
This analysis identifies the strengths, weaknesses, opportunities, and threats for Warner Bros. Discovery, Inc. (WBD) to inform strategic decisions.
Strengths
- Strong brand portfolio
- Diverse revenue streams
- Extensive content library
Weaknesses
- High debt levels
- Inconsistent profitability
- Limited international presence
Opportunities
- Growing streaming market
- Expansion in international markets
- Strategic partnerships
Threats
- Intense competition
- Regulatory challenges
- Rapid technological changes
In summary, WBD’s strengths position it well for growth, particularly in the expanding streaming market. However, it must address its debt and competition challenges to enhance its strategic outlook and drive sustainable profitability.
Stock Analysis
In the past year, Warner Bros. Discovery, Inc. (WBD) has experienced notable price movements, characterized by a significant bullish trend that has led to heightened trading dynamics.
Trend Analysis
Over the past year, WBD’s stock price has surged by 144.88%, indicating a strong bullish trend. The stock has shown acceleration in its upward movement, with notable highs reaching $26.08 and lows at $7.03. Additionally, the standard deviation of 4.29 suggests a moderate level of volatility, implying that while the stock has been on an upward trajectory, fluctuations have occurred.
Volume Analysis
In the last three months, trading volumes have notably increased, with a total volume of 20.73B shares. The buyer-driven activity is evident, with buyer volume amounting to 12.46B shares, representing 60.1% of total trading activity. Recent trends indicate a strongly buyer-dominant environment, particularly from September 21, 2025, to December 7, 2025, where buyer volume was 2.25B shares compared to seller volume of just 329.16M shares. This increasing volume trend suggests heightened investor sentiment and participation in favor of WBD.
Analyst Opinions
Recent analyst recommendations for Warner Bros. Discovery, Inc. (WBD) have been cautiously optimistic. Analysts have predominantly rated the stock as a “Buy,” citing a solid debt-to-equity ratio of 4, which indicates manageable financial leverage. However, concerns about a low price-to-earnings score of 1 suggest caution regarding valuation. Analysts such as those at a leading investment firm have highlighted the company’s potential for growth in streaming and content production. The consensus for 2025 leans toward a “Buy,” reflecting confidence in future performance while advocating for prudent risk management.
Stock Grades
The latest stock ratings for Warner Bros. Discovery, Inc. (WBD) indicate a mix of sentiments among analysts.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barrington Research | Downgrade | Market Perform | 2025-12-05 |
| Barrington Research | Maintain | Outperform | 2025-11-14 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-07 |
| Rothschild & Co | Upgrade | Buy | 2025-10-30 |
| Barrington Research | Maintain | Outperform | 2025-10-28 |
| Argus Research | Upgrade | Buy | 2025-10-28 |
| Benchmark | Maintain | Buy | 2025-10-22 |
| Wells Fargo | Maintain | Equal Weight | 2025-10-16 |
| Guggenheim | Maintain | Buy | 2025-10-08 |
| UBS | Maintain | Neutral | 2025-10-06 |
Overall, the trend shows a recent downgrade by Barrington Research, which may reflect a cautious outlook, while other firms maintain their positive ratings. Notably, the upgrades from Rothschild & Co and Argus Research indicate some analysts still see potential in the stock.
Target Prices
The consensus target price for Warner Bros. Discovery, Inc. (WBD) reflects a balanced outlook from analysts.
| Target High | Target Low | Consensus |
|---|---|---|
| 28 | 15 | 21.6 |
Overall, analysts expect WBD to trend towards the consensus price of 21.6, indicating moderate optimism in its market performance.
Consumer Opinions
Consumer sentiment towards Warner Bros. Discovery, Inc. (WBD) reflects a mix of enthusiasm and criticism, revealing both strengths and areas for improvement.
| Positive Reviews | Negative Reviews |
|---|---|
| “Great content variety and new releases!” | “Customer service needs significant improvement.” |
| “The streaming quality is top-notch.” | “Subscription pricing feels high compared to competitors.” |
| “I love the exclusive shows available.” | “App interface could be more user-friendly.” |
| “Frequent updates keep the platform fresh.” | “Some popular shows are missing.” |
Overall, consumer feedback highlights Warner Bros. Discovery’s strong content library and streaming quality as major strengths, while concerns about customer service and pricing are recurring weaknesses.
Risk Analysis
In assessing the investment potential of Warner Bros. Discovery, Inc. (WBD), it’s crucial to identify and analyze the associated risks. Below is a concise table summarizing key risks.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in market demand for streaming and content. | High | High |
| Regulatory Risk | Changes in media regulations impacting content distribution. | Medium | High |
| Competition Risk | Intense competition from other streaming services. | High | Medium |
| Debt Risk | High debt levels may affect financial flexibility. | Medium | High |
| Economic Risk | Economic downturns affecting advertising revenue. | Medium | Medium |
In summary, market fluctuations and regulatory changes pose significant risks to WBD, with potential impacts on revenue generation and operational stability. Given the competitive landscape, I exercise caution in my investment approach.
Should You Buy Warner Bros. Discovery, Inc.?
Warner Bros. Discovery, Inc. (WBD) has reported a significant decline in profitability with a net income of -11.31B in FY 2024, indicating ongoing challenges. The company’s return on invested capital (ROIC) stands at -11.00%, while the weighted average cost of capital (WACC) is 8.56%, suggesting value destruction. With a debt of 39.51B and total equity of 63.90B, the company’s fundamentals have shown deterioration over recent years. The overall rating is B, reflecting a cautious outlook amid financial instability.
Favorable signals
In the analysis of Warner Bros. Discovery, Inc. (WBD), I found a few favorable elements. The company exhibits a positive fixed asset turnover of 6.46 and a price-to-book ratio of 0.76, both indicating effective asset utilization and potential undervaluation. Additionally, the price-to-earnings ratio of -2.29 might suggest attractive pricing relative to earnings.
Unfavorable signals
However, there are notable unfavorable signals as well. The revenue growth is at -4.84%, and the net margin is significantly negative at -28.77%. Furthermore, the return on invested capital (ROIC) stands at -11.0%, indicating value destruction, while the debt-to-equity ratio of 1.26 and interest coverage of -4.65 reflect financial distress.
Conclusion
Considering the unfavorable global income statement opinion and the negative long-term trend, it might be prudent to wait for buyers to return before making any investment decisions regarding WBD.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Warner Bros. Discovery-Netflix Merger: A Fair Arb Return If You Are Patient (NASDAQ:WBD) – Seeking Alpha (Dec 05, 2025)
- Warner Bros. Discovery’s Buyer Is All But Certain (NASDAQ:WBD) – Seeking Alpha (Dec 05, 2025)
- Netflix To Acquire Warners Bros Discovery In Massive $82.7 Billion Deal: NFLX Stock Falls Over 2%, WBD Gains 3% In Premarket – Benzinga (Dec 05, 2025)
- Netflix to Acquire Warner Bros. Following the Separation of Discovery Global for a Total Enterprise Value of $82.7 Billion (Equity Value of $72.0 Billion) – About Netflix (Dec 05, 2025)
- Paramount questions Warner Bros. Discovery on ‘fairness and adequacy’ of sale process: Read the full letter – CNBC (Dec 04, 2025)
For more information about Warner Bros. Discovery, Inc., please visit the official website: ir.wbd.com
