When you think about 2021 success stories, one of them would seem to be Walt Disney (DIS 0.33%). It's the studio behind this year's two highest-grossing films at the domestic box office. Disneyland in California reopened in the spring, and the company resumed its cruise ship sailings over the summer. 

Revenue soared a better-than-expected 45% in its latest quarter, its headiest year-over-year surge in ages, although admittedly the performance follows depressed results a year earlier. Disney is back in business, but the same can't be said about its stock chart. After climbing 26% last year -- when it wasn't exactly running on all cylinders -- the stock finds itself trading 4% lower in 2021 through Monday's close. It doesn't seem fair, so let's break down why Wall Street isn't exactly doing the Mickey Mouse March these days.

Mickey and Minnie Mouse in front of the Magic Kingdom's castle in Florida.

Image source: Disney.

Grate expectations

Sizing up this year's seemingly inexplicable slide has to begin with assessing last year's inexplicable ascent. Disney was hit hard by the pandemic, posting double-digit declines in year-over-year revenue for four consecutive quarters before its springtime bounce this year. With its theme parks either closed or operating at limited capacity and no theatrical outlet for its big-budget films, it's easy to see why last year was rough for the House of Mouse.

However, Disney+ proved to be a silver bullet in the pandemic. Launched near the end of 2019, the premium streaming service catapulted into homes worldwide through 2020. There are now 116 million paid subscribers worldwide. Despite its making up a small part of the revenue mix at Disney, the success of the new service gave growth investors a reason to see the media giant as a promising streaming service stock for which wider valuation multiples were acceptable. 

Disney+ hasn't been a driver in the 2021 calendar year. Subscriber growth has slowed, and average revenue per user has contracted as it is rolled out in new countries where monthly subscription rates are lower. The move has shifted the attention back to Disney as a blue chip media mogul, and that isn't as easy a sell as one might think in this climate.

Income investors who bailed on Disney when it suspended its payout in the early stages of the COVID-19 crisis aren't coming back because the payouts aren't coming back. Disney doesn't seem to be in a hurry to return money to its shareholders through cash distributions, especially when that money can be put to better use building out its streaming content, upgrading its theme parks, and expanding its fleet of cruise ships.

As popular as Disney+ is, Disney doesn't expect it to turn a profit until fiscal 2024. Its broadcasting and media networks arm, which held up reasonably well last year when folks spent more time watching TV at home, still faces a problematic future of cord-cutters as consumers cancel their cable and satellite TV services.   

If this sounds bleak, let's end with a fairy-tale finish worthy of a Disney animated classic. Disney stunned investors when its theme parks segment returned to profitability in its latest quarter, and the future is even brighter with new monetization initiatives that will drive per-capita spending higher in the year ahead. Disney is already winning again at the local multiplex, but it's been holding back on some of its biggest releases, which will be blockbusters in the coming quarters. Fiscal 2022 -- which began less than two weeks ago -- is going to be strong for Disney. The stock may not reflect that right now, but since it's just a good trading day or two away from turning 2021 positive, it wouldn't be a surprise if Disney moves higher this calendar year by the time we're done. Disney may be down, but it's certainly not out.