Disney Becoming A Streaming Juggernaut

Disney continues to exceed all expectations in the streaming space accelerated by the stay-at-home COVID-19 environment. The Walt Disney Company (DIS) has been posting phenomenal streaming numbers that have thus far negated the COVID-19 impact on its other business segments, specifically its theme parks. Disney has had to shutter all its worldwide Parks and Resorts, and ESPN has been hit with the cancellation of virtually all sports worldwide. There’s been ebbs and flows with reopening efforts across the globe with mixed results followed by rolling lockdown measures. Despite the COVID-19 headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 impact on its theme parks to a durable and sustainable recurring revenue model. This streaming bright spot, in conjunction with the optimism of its Park and Resorts coming back online, has been a perfect combination as of late. Disney+ has racked up 73.7 million paid subscribers, Hulu has 36.6 million paid subscribers, and ESPN+ has 10.3 million paid subscribers. Disney now has over 120 million paid streaming subscribers across its platforms. Disney+ has been wildly successful via unleashing all of its content (Marvel, Star Wars, Disney, and Pixar) in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts versus the success of its streaming initiatives, with the latter winning out. Thus far, its streaming success has changed the narrative as its stock is approaching highs not seen since February. Disney is a compelling buy for long-term investors as its legacy business segments get back on track in 2021 in conjunction with these successful streaming initiatives.

Seeing Though COVID-19

Disney’s business segments will inevitably come back online as COVID-19 subsides worldwide, and widespread vaccination programs are rolled out. Disney’s theme parks will reopen over time, as seen with phased reopening efforts. Inevitably, movie productions will resume, movie theaters and theme parks will reopen to full capacity, and sports will return to pre-COVID formats. The resumption of all of these activities will feed into Disney’s legacy businesses in conjunction with its streaming successes. Disney continues to dominate the box office year after year with a long pipeline of blockbusters in the queue. Its Parks and Resorts continue to be a growth avenue with tremendous pricing power outside regardless of COVID-19. Disney is going all-in on the streaming front and acquired full ownership of Hulu. The company has launched its Disney branded streaming service with tremendous success with kudos from Netflix’s (NFLX) CEO Reed Hastings himself. I feel that the company offers a compelling long-term investment opportunity given its growth catalysts that will continue to bear fruit over the coming years despite the current headwinds. Continue reading "Disney Becoming A Streaming Juggernaut"

Disney Streaming Negating COVID-19 Impact

Disney’s impressive streaming numbers have thus far negated the impact that COVID-19 has had on its other business segments, mainly its parks. The Walt Disney Company (DIS) has had to shutter all of its worldwide Parks and Resorts, and ESPN has been hit with the cancellation of virtually all sports worldwide. Advertising revenue coming through its media properties has been hit as companies scale back ad spending. All of its movie studio productions have been halted, and movie releases are postponed. Despite the COVID-19 headwinds, streaming initiatives have been major growth catalysts for the company. Disney+’ growth in its subscriber base has shifted the conversation from COVID-19 to a durable and sustainable recurring revenue streaming model. This temporary bright spot, in conjunction with the optimism of its Park and Resorts coming back online, has been a perfect combination as of late. Disney+ has racked up 57.75 million paid subscribers, Hulu has 35.5 million paid subscribers, and ESPN+ has 8.5 million paid subscribers. Disney now has over 100 million paid streaming subscribers across its platforms. Disney+ has been wildly successful via unleashing all of its content (Marvel, Star Wars, Disney, and Pixar) in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between COVID-19 impacts versus the success of its streaming initiatives. Thus far, its streaming success has changed the narrative as its stock is approaching highs not seen since February. Disney is a compelling hold as its legacy business segments get back on track in conjunction with these successful streaming initiatives.

Long Game

Disney’s business segments will regain their health as COVID-19 subsides worldwide and/or there’s a vaccine approved. Parks will reopen as seen with Shanghai, Hong Kong, and Disney World. Inevitably, movie productions will resume, movie theaters and resorts will reopen, and sports will play-on. The resumption of all of these activities will feed into Disney’s legacy businesses in conjunction with its streaming successes. Disney continues to dominate the box office year after year with a long pipeline of blockbusters in the queue. Its Parks and Resorts continue to be a growth avenue with tremendous pricing power outside of COVID-19. Disney is going all-in on the streaming front and acquired full ownership of Hulu, and the company has launched its Disney branded streaming service with tremendous success with kudos from Reed Hastings. I feel that the company offers a compelling long-term investment opportunity given its growth catalysts that will continue to bear fruit over the coming years despite the current headwinds. Continue reading "Disney Streaming Negating COVID-19 Impact"

Tug-of-War: Disney Streaming vs. COVID-19

Clearly, COVID-19 has been very damaging with an unquantifiable impact across Disney’s (DIS) business segments. Disney has had to shutter all of its worldwide Parks and Resorts. ESPN has been hit with the cancellation of virtually all sports worldwide. Advertising revenue coming through its media properties has been hit as companies scale back ad spending. All of its movie studio productions have been halted, and movie releases postponed. Despite these headwinds, Disney’s streaming initiatives have been major growth catalysts for the company. Disney+ has racked up over 50 million paid subscribers in just five months, Hulu has 30 million paid subscribers, and ESPN+ has 7.9 million paid subscribers. Disney+ has been wildly successful via unleashing all of its content (Marvel, Star Wars, Disney, and Pixar) in what has become a formidable competitor in the ever-expanding streaming wars domestically and internationally. Hence the tug-of-war on Wall Street between the COVID-19 induced negative impact and the success of its streaming initiatives in terms of valuation. The stock is selling at a steep discount of ~30% from its highs of $151 per share. At these reduced COVID-19 levels, Disney is a compelling buy as its legacy business segments get back on track in conjunction with these successful streaming initiatives.

COVID-19 Perspective

As economies around the world reopen and certainty washes over the COVID-19 landscape, Disney’s business segments will regain their health. Parks will reopen as seen with Disney Shanghai, movie productions will resume, movie theaters and resorts will reopen, and sports will inevitably play-on. The resumption of all of these activities will feed into Disney’s legacy businesses. Disney continues to dominate the box office year after year with a long pipeline of blockbusters in the queue. Parks and Resorts continue to be a growth avenue with tremendous pricing power. Disney is going all-in on the streaming front and acquired full ownership of Hulu, and the company is launched its Disney branded streaming service with great success. I feel Continue reading "Tug-of-War: Disney Streaming vs. COVID-19"

Disney Delivers 26.5M Disney+ Subscribers

Disney (DIS) just delivered a stellar quarter beating on both the top and bottom lines while continuing to roll out its growth initiatives via streaming. Disney’s growth rotation is still in the early stages with the remediation of its ESPN property and flurry of growth initiatives to meet the demands of the modern-day media consumption trends. In the backdrop, the company continues to dominate the box office year after year with a long pipeline of blockbusters in the queue. Additionally, its Parks and Resorts continue to be a growth avenue with tremendous pricing power albeit the coronavirus will damper its Shanghai and Hong Kong operations. Disney is going all-in on the streaming front and acquired full ownership of Hulu and the company is launched its Disney branded streaming service. Disney Plus launched on November 12th with all of its content (Marvel, Star Wars, Disney and Pixar) which will be a formidable competitor in the ever-expanding streaming wars both domestically and internationally. As a result of its strong Q1 numbers, Disney has hit near all-time highs of ~$150 per share. I’ve been behind Disney for a long time, especially through this transition back to growth when the stock traded below $100 and I still feel that the company offers a compelling long-term investment opportunity given its growth catalysts that will continue to bear fruit over the coming years.

Disney Plus, Hulu, ESPN Plus and Q4 Earnings

Disney’s Q1 earnings easily beat analysts’ expectations with strong gains in its streaming platforms such as ESPN Plus, Hulu and Disney Plus. Disney beat on both the top-line revenue and bottom-line profit. EPS came in at $1.53, beating by $0.09 per share and revenue came in at $20.86 billion, beating by $50 million. Revenue grew by 36% year-over-year and for the fiscal year.
Disney Plus subscribers came in at 26.5 million, well ahead of expectations that were ~20 million. ESPN Plus subscribers came in at 6.6 million and Hulu subscribers came in at 30.4 million. Hulu saw a 33% year-over-year growth in subscribers.

Disney’s business across the board came in strong, posting growth in every category. Continue reading "Disney Delivers 26.5M Disney+ Subscribers"

Disney's Streaming Growth Driver - ESPN/Disney+/Hulu

Disney (DIS) just delivered a stellar quarter beating on both the top and bottom lines while continuing to roll out its growth initiatives.

Disney’s growth rotation is still in its early stages with the remediation of its ESPN property and flurry of growth initiatives to meet modern-day media consumption trends via streaming with its Disney+ property. In the backdrop, the company continues to dominate the box office year after year with a long pipeline of blockbusters in the queue, notably Frozen 2 and Star Wars: The Rise of Skywalker. Additionally, its Parks and Resorts continue to be a growth avenue with tremendous pricing power. Disney is going all-in on the streaming front and will inevitably acquire full ownership of Hulu, and the company is launching its Disney branded streaming service that will compete directly with Netflix (NFLX).

Disney+ launches on November 12th, and Disney is unleashing all of its content (Marvel, Star Wars, Disney, and Pixar), which will be a formidable competitor in the ever-expanding streaming wars. As a result of its strong Q4 numbers, Disney has hit near all-time highs of ~$140 per share. I’ve been behind Disney for a long time, especially through this transition back to growth when the stock traded below $100, and I still feel that the company offers a compelling long-term investment opportunity given its growth catalysts that will continue to bear fruit over the coming years.

Disney’s Stellar Q4 Earnings

Disney’s Q4 earnings easily beat analysts’ expectations with substantial gains in its television networks and film studio by way of its Fox acquisition. Disney beat on both the top-line revenue and bottom-line profit. EPS came in at $1.07, beating by $0.10 per share, and revenue came in at $19.1 billion, beating by $80 million. Revenue grew by 34% year-over-year, and for the fiscal year, revenue was up 17% at $69.57 billion.

Disney’s business across the board came in strong, posting growth in every category. Revenue by segment: Media Networks, $6.51 billion (up 22%); Parks, Experiences and Products, $6.7 billion (up 8%); Studio Entertainment, $3.3 billion (up 52%); Direct-to-Consumer and International, $3.4 billion (up 361%). Operating income by segment: Media Networks, $2.14B (up 7%); Parks, Experiences and Products, $1.7B (up 4%); Studio Entertainment, $792M (up 13%); Direct-to-Consumer and International, -$553M. Continue reading "Disney's Streaming Growth Driver - ESPN/Disney+/Hulu"