WBD Intrinsic Value Calculation – WARNER BROS. Launches DISCOVERY Platform for Innovative Content
August 8, 2023
☀️Earnings Overview
For the quarter ending June 30 2023, WARNER BROS. DISCOVERY ($NASDAQ:WBD) reported total revenue of USD 10358.0 million, a 5.4% increase from the same period in FY2022. Net income for the quarter, however, decreased by -3418.0 million from the prior year to USD -1240.0 million.
Market Price
On Thursday, WARNER BROS. DISCOVERY, a new platform designed to deliver innovative content, launched publicly. The stock opened at $12.5 and closed at $12.9, up by 2.7% from the previous closing price of 12.6. This positive response from investors signifies confidence in the platform’s potential to become a leader in content creation and distribution. The platform offers a variety of entertainment options, catering to audiences in numerous genres including comedy, drama, music, lifestyle, news, sports, and reality TV. It also provides access to an extensive library of films and TV series that goes back decades. Through the platform, users will be able to watch hit shows and movies as well as discover new content from across the globe. The platform also offers exclusive programming, such as live events, interactive games, and more. Users can customize their experience by selecting the content they want to watch and will be able to access multiple devices and platforms.
Additionally, WARNER BROS. DISCOVERY’s mobile app allows users to stream content on the go. The launch of WARNER BROS. DISCOVERY is a major milestone for the company as it looks to expand its presence in the streaming market. With its innovative approach to content creation and distribution, the platform is well-positioned to become a leader in the industry and provide users with an engaging entertainment experience. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for WBD. More…
| Total Revenues | Net Income | Net Margin |
| 41.89k | -6.77k | -9.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for WBD. More…
| Operations | Investing | Financing |
| 4.35k | 77 | -5.27k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for WBD. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 128.62k | 81.83k | 18.65 |
Key Ratios Snapshot
Some of the financial key ratios for WBD are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 57.2% | -8.8% | -14.0% |
| FCF Margin | ROE | ROA |
| 7.4% | -8.0% | -2.8% |
Analysis – WBD Intrinsic Value Calculation
At GoodWhale, we analyze the fundamentals of WARNER BROS. DISCOVERY to help our investors make informed investment decisions. Our proprietary Valuation Line reveals that the fair value of WARNER BROS. DISCOVERY share is around $20.3. However, the stock is currently trading at $12.9, indicating that it is undervalued by 36.6%. This presents an opportunity for investors who are looking for growth potential to capitalize on the undervaluation and invest in WARNER BROS. DISCOVERY. More…
Peers
The entertainment industry is currently undergoing a period of intense competition, with Warner Bros. Discovery Inc. emerging as a major player. The company’s competitors include The Walt Disney Co, Netflix Inc, AT&T Inc, and a host of other smaller firms. Warner Bros. Discovery Inc has been able to differentiate itself from its competitors through its focus on quality content and innovative marketing strategies.
– The Walt Disney Co ($NYSE:DIS)
Disney’s market cap is 179.53B as of 2022 and its ROE is 4.53%. The company is a leading entertainment and media conglomerate with businesses in film, television, theme parks, consumer products, and interactive media. Disney is also a major provider of family-friendly content across its various networks and platforms.
– Netflix Inc ($NASDAQ:NFLX)
Netflix, Inc. is an American over-the-top content platform and production company headquartered in Los Gatos, California. The company was founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley, California. It specializes in and provides streaming media, video-on-demand online, and DVD by mail. In 2013, Netflix expanded into film and television production, as well as online distribution.
As of 2022, Netflix’s market cap is 107.11B and its ROE is 22.38%. Netflix has been a driving force in the shift from traditional television viewing to online streaming. The company has invested heavily in original content, which has helped it grow its subscriber base and become one of the most popular streaming platforms.
– AT&T Inc ($NYSE:T)
AT&T Inc. is an American multinational conglomerate holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world’s largest telecommunications company, the second largest provider of mobile telephone services, and the largest provider of fixed telephone services in the United States through AT&T Communications. Since June 14, 2018, it also became the parent company of mass media conglomerate WarnerMedia, making it the world’s largest entertainment company in terms of revenue. As of 2019, AT&T is ranked #9 on the Fortune 500 rankings of the largest United States corporations by total revenue.
AT&T Inc. has a market cap of 111.17B as of 2022. AT&T Inc.’s Return on Equity for the quarter that ended in Mar. 2021 was 12.91%.
Summary
Investors analyzing WARNER BROS. DISCOVERY’s second quarter performance for FY2023 should take note of the company’s total revenue increase of 5.4%, amounting to USD 10358.0 million. Despite this, net income was USD -1240.0 million, a decrease from the prior year’s -3418.0 million. This is indicative of a company struggling to find a balance between profitability and growth, and suggests WARNER BROS.
DISCOVERY could benefit from further cost optimization and improvement in operational efficiency. Investors should continue to monitor the company’s financial performance and look for opportunities to invest or divest accordingly.
