Walt Disney's (DIS 0.18%) stock price is up 44% over the last year but down 3% year to date. While the parks, experiences, and products segment finally returned to a profit last quarter, traffic is still down from pre-pandemic levels, which is weighing on Disney's financial performance. Through the first nine months of fiscal 2021, revenue from the parks segment was down 22% year over year, while the operating loss of $169 million marked a major reversal from a year-ago profit of $1.4 billion. 

The company clearly has a ways to go to fully recover, but investors should be buying Disney stock hand over fist right now. Here's why.

Disney above a series of images of streaming content available on Disney plus.

Image source: Walt Disney.

Disney+ should far exceed 260 million subscribers

The stock initially sold off after the fiscal 2021 second-quarter earnings report in May, when Disney+ subscribers came in below analysts' expectations. Most recently, Disney+ ended the fiscal third quarter with 116 million subscribers, but those who have already subscribed are likely from Disney's diehard fan base, so the next 100 million won't come as easily. Market participants are likely thinking the same thing, especially since many new streaming services have launched over the last year, which could lead to subscription fatigue. 

The pressure is definitely on Disney to produce more content like The Mandalorian. Not to take too much away from Disney's classic film library, but the Galactic adventures of a heartwarming character like Grogu (aka Baby Yoda) definitely played a role in Disney's rapid subscriber gains to date.

And management might have made a mistake in providing subscriber guidance for Disney+ in the first place. It would have been better to let the growth of the service speak for itself. Nonetheless, management's outlook calls for Disney+ to reach 230 million to 260 million subscribers by fiscal 2024. 

It's really not a meaningful number for long-term investors. There are enough fans of Disney around the world for Disney+ to far exceed 260 million subscribers over the long term. The most important number Disney has given is actually one billion. That's the number of people who identify as dedicated fans of Disney's content globally, according to the company's estimates. Disney may not actually reach one billion subscribers, at least not within the next 10 years, but with that many fans around the globe, it's not difficult to imagine Disney+ reaching half that number long term.

Remember the adoption of streaming is still in its early innings. One analyst estimates Netflix can reach 500 million subscribers by 2030, more than double its recent total. Another estimate by Allied Market Research shows the streaming video market should grow at a compound annual rate of 18% through 2026. Disney+ has been growing much faster than that, but looking out over many years, top streaming services like Netflix and Disney have a long runway of growth.

There are more than four billion people around the world with internet access, according to Statista. Disney has an advantage in being able to offer discounted bundles with Disney+, ESPN+, and Hulu to grow its total subscriber count across these services. CEO Bob Chapek mentioned on the second-quarter earnings call that the opportunity to grow the bundle in the U.S. "continues to impress us." Across all three services, management expects to reach at least 300 million subscribers by fiscal 2024.

Now's the time to buy Disney stock

We haven't seen the true potential of Disney+ yet. The company has invaluable content across Star Wars, Marvel, and Pixar that can appeal to a global audience, especially as Disney starts to unleash fresh films and series from these top entertainment brands. In December, Disney said it has 10 original series coming from Marvel and Star Wars each over the next few years, along with 15 original series across Disney live action, animation, and Pixar.

The streaming momentum at Disney is clear. Add on top of that improving trends at its theme parks, and Disney should be a magical stock for investors over the long term.