Walt Disney (NYSE:DIS) is on top of the world these days, but it's not at the top of its game in terms of its recent financial performance. Disney stock broke through to new all-time highs in December, but this is also a company that just posted a quarterly loss on a 23% year-over-year plunge in revenue in its latest financial update.

To Disney's credit, the top-line slide and bottom-line deficit were actually healthier than what analysts were forecasting on both ends of the income statement. No one expects Disney to be firing on all cylinders when you're getting hit hard by a pandemic with theme parks closed or running at lower capacities, cruise ships off the travel menu, and folks hesitant to take the family out to the corner multiplex for a matinee. Disney is riding high right now because investors are excited about the future, fueled by the amazing rookie season at Disney+.

You can apparently teach an old mouse some new tricks, but will it be enough to keep the gains coming in 2021? Let's dive in to see if Disney stock is a buy here.

Mickey Mouse dressed in holiday attire at Disney World's Magic Kingdom.

Image source: Walt Disney.

This is the way

Disney shares have now more than doubled since the mid-March low when most equities bottomed out. A lot of stocks have had heartier bounces, but Disney is a company that had more to lose than gain in the pandemic. Revenue plummeted 42% in its fiscal third quarter ending in June, as steady performance for its media networks and Disney+ were more than offset by the shortfalls elsewhere. 

If Disney is going to be a good buy here it's going to have to execute flawlessly on Disney+, and that's not a surprise since the platform is why the shares are trading this high. However, it's also going to have to turn its struggling business segments around soon. 

The media stock bellwether is expected to triple its Disney+ subscriber base in the next four years, but unfortunately, that's also when it expects the platform to finally turn profitable. The average revenue per user has been trending lower as it expands into India and other markets where it's charging less, but that trend should improve in a few months when it bumps prices higher in the U.S. and other affluent countries. 

Disney+ will be just fine. It has proven that a single hit show -- The Mandalorian just completed its high-stakes second season -- is enough when you have the deepest catalog bench in the business. Just imagine how things will play out as it scores more hits with the number of Marvel, Star Wars, and Pixar shows and films it expects to roll out exclusively on Disney+.   

The real driver for Disney stock will be what happens with the rest of its business. Disney+ is riding the cord-cutting revolution, but its legacy media networks stand to lose in the migration process. The long-term outlook for big-budget theatrical releases is murky, and Disney+ combined with premium streaming access to major releases may not be enough to offset the shortfall. Disney's theme parks, resorts, and cruise lines will recover at the other end of the pandemic, but it won't happen right away. Local leisure industries will be the first to bounce back, and Disney -- more than any theme park operator -- relies on international travel to attract its biggest spenders. 

Disney isn't going to double in the next nine months the way it has through the last nine months. However, you can't bet against Disney's chances to beat the market in the long run. It has an unmatched arsenal of intellectual property at its disposal, and content is king. Content is The Lion King if you will. 

With a likely return of its dividend bringing back income investors in 2021, continuing momentum for its Disney+ strategy, and at least the start of the pandemic and recession recovery next year, Disney still makes sense here. Disney stock is a buy. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.