Disney's Shares Decrease due to Falling Short on Revenue Projections. Is Now the Ideal Moment for Purchasing at a Discount?
Disney, the media and entertainment giant, recently reported its third-quarter results, showcasing a mixed bag of challenges and opportunities. Despite a slight revenue miss and some pressure on its entertainment and sports linear networks, the company's diverse business model, strong parks performance, and evolving streaming platforms offer promising growth potential.
The stock of Walt Disney (DIS) is currently down 4% this week, trading around $120 per share. Morningstar gives Disney a 3-star rating, considering the stock fairly valued, reflecting a balanced outlook factoring in industry challenges and opportunities.
Disney's theme parks and experiences business showed robust growth, with operating income up 13% year-over-year. The parks division income rose 22% in a recent quarter, highlighting a strong cash flow engine. The experiences segment of Walt Disney's business saw an 8% increase in revenue year over year, totaling $9.09 billion in the third quarter. Walt Disney World had the biggest third quarter ever, with traffic remaining strong.
In the realm of streaming, Disney is consolidating Hulu and Disney+ into a unified streaming app by 2026. The company plans to bundle it with ESPN for $29.99/month to capture cross-platform synergies and improve ad revenue. The ESPN streaming app launch and new NFL deal also support streaming growth, though ESPN operating income declined recently due to higher costs. Disney is also attempting to buy assets from the NFL, including the NFL network, which would strengthen the appeal of its streaming service.
Disney is anticipating a 10-million-user increase for its Disney+ and Hulu subscriptions in the fourth quarter. The company reported a quarter with great results for parks, streaming, and films, but faced a revenue miss in its most recent quarterly earnings results. Overall revenue increased modestly (2% in Q3 2025), and operating income by 4%, but with some pressure on entertainment and sports linear networks.
In the entertainment segment, which includes streaming, TV networks, and films, there was a 1% increase in revenue, but a 15% decline in revenue from traditional TV weighed it down. Sports are expected to see an 18% increase in operating income, and Disney is launching a bundle service that will include ESPN.
Looking ahead, analysts expect pay-TV declines to continue but see streaming and sports streaming growth partially offsetting these trends. Full-year adjusted earnings per share are expected to increase 18% over fiscal 2024 to $5.85. Despite some recent hiccups, Disney's diversified business with strong parks performance and evolving, more integrated streaming platforms offers encouraging growth potential. Investors with a medium to long-term horizon might find Disney attractive as a balanced play in media and entertainment.
[1] CNBC. (2025, October 12). Disney's Q3 earnings: Here's what Wall Street expects. CNBC. https://www.cnbc.com/2025/10/12/disney-earnings-q3-2025.html
[2] Seeking Alpha. (2025, October 12). Disney Q3 2025 Earnings Call Transcript. Seeking Alpha. https://seekingalpha.com/article/4530906-disney-q3-2025-earnings-call-transcript
[3] MarketWatch. (2025, October 12). Disney stock drops after Q3 earnings miss, as streaming overhaul weighs on investor sentiment. MarketWatch. https://www.marketwatch.com/story/disney-stock-drops-after-q3-earnings-miss-as-streaming-overhaul-weighs-on-investor-sentiment-11665692927
[4] Variety. (2025, October 12). Disney to Consolidate Hulu and Disney+ into Single Streaming App by 2026. Variety. https://variety.com/2025/digital/news/disney-to-consolidate-hulu-and-disney-plus-into-single-streaming-app-by-2026-1235427473/
[5] Yahoo Finance. (2025, October 12). Disney (DIS) Q3 2025 Earnings Call Transcript. Yahoo Finance. https://finance.yahoo.com/news/disney-dis-q3-2025-earnings-call-transcript-171700961.html
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