Disney Stock: 4 Key Metrics Validating Its Comeback

Key Points

• Disney has turned its streaming services segment profitable in its direct-to-consumer (DTC) segment, posting a $431 million swing from a loss of $138 million to a profit of $293 million in Q4 2023.
• Disney’s Experiences segment revenues increased 9% YoY to $9.4 billion with a flat operating income of $3.1 billion.
• Disney’s price-earnings (P/E) ratio had fallen to 8.54 with a 3.73% dividend.

The Walt Disney Co. NYSE: DIS is the world's second-largest entertainment company with a portfolio of franchises ranging from Marvel Studios, Lucasfilm, Pixar, 20^th Century Studios, Disney+, ESPN, ABC, theme parks and cruises, and a majority stake in streaming service Hulu.

The return of CEO Bob Igor in November 2022 set the stage for a turnaround in the consumer discretionary sector giant after Disney+ continued to lose $1.5 billion.

After leading the efforts for more than two years, the comeback is working and here are four key metrics that validate its success.

1) Earnings Are on the Rise Again, Up 44% YoY in Q1 2025

Disney reported a first-quarter 2025 earnings per share (EPS) up 44% year-over-year (YoY) to $1.76. Its direct-to-consumer (DTC) business was a strong contributor, bolstered by price increases for Disney+ and Hulu streaming services. Income before income taxes jumped 27% to $3.7 billion. Its film studio business Content Sales/Licensing segment revenues surged 34% YoY to $2.2 billion thanks to hits like Moana 2, Inside Out 2 and Deadpool & Wolverine.

2) Streaming Services Have Become Profitable

Average revenue per user (ARPU) rose 5% YoY for Disney+ and 4% YoY for Hulu, driven by price increases. The price increases didn't cause too much churn as Disney+ subscribers fell to 124.6 million, which still beat analyst expectations. However, Disney did guide for a small decline in Disney+ members in Q2 2025.

Disney’s direct-to-consumer (DTC) business has completely reversed course after finally turning a profit in Q4 2024. It continued to add to the momentum, with operating income improving by $431 million YoY to $293 million from a loss of $138 million in Q4 2023.

While Disney+ membership slipped by 700,000 subscribers sequentially from Q4 2024, the total Disney+ and Hulu subscriber base rose 900,000 to 178 million subscriptions. Swapping out lower ARPU customers with higher ARPU customers. Disney+ will be the home to all of the company's streaming products, including ESPN and sports. Sports revenue rose 9% to $4.422 billion domestically and rose 7% YoY to $389 million internationally.

Disney had taken full ownership of Hulu streaming services from Comcast Co. NASDAQ: CMCSK in 2023 for $8.6 billion.

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3) The Theme Park Business Continues to Print Money Despite Hurricanes

Domestic Parks and Experiences operating income fell 5% YoY, which also includes a 9% adverse impact on YoY growth due to hurricanes and cruise pre-opening expenses. International Parks & Experiences saw a 28% YoY surge in revenues.

Experiences revenues edged up 9% YoY to $9.4 billion with a flat operating income of $3.1 billion, which is pretty impressive considering its theme parks took a $120 million hit from Hurricane Milton and, to a lesser extent, Hurricane Helene. Walt Disney World Resort was closed for a day, and the cruise itinerary was canceled.

Operating results for its domestic theme parks decreased YoY due to higher costs, primarily due to the fleet expansion at Disney Cruise Lines and inflation, lower attendance volumes (due to the hurricanes) and increased guest spending. International Park's growth was driven by guest spending, higher volumes and an increase in costs, primarily due to new guest offerings.

The company spent $1.79 billion in domestic capital expenditures. Due to higher spending on its cruise ship fleet expansion in the Experiences segment,

Morgan Stanley believes the Parks & Experiences segment will continue to generate the majority of the company's revenues in the immediate future. "Parks are a key differentiator relative to the rest of our media coverage and strategically are unique in creating tangible interactions for IP and franchises in the form of rides, characters, and merchandise.”

4) The Stock Is Attempting a Daily Market Structure Low (MSL) Reversal

DIS stock collapsed after peaking at $115.55 on March 3, 2025, making eight consecutive lower lows on the candlestick chart.

The market structure low (MSL) reversal triggers are based on a three-candle reversal formation comprised of a new low, a lower low and a higher low candle. The reversal bounce is triggered when the high of the higher-low candle is broken. For DIS stock, the daily MSL triggers above $99.10, which would confirm the price reversal as it attempts to reverse the downtrend.