Walt Disney (DIS +0.49%) investors are buzzing. Shares of the media giant have moved higher for five consecutive trading days, soaring 16% in that time. A blowout earnings report last week checked off all of the right boxes, and there are good reasons to get excited about Disney's near-term and long-term prospects.
It's a role reversal worthy of a glass slipper turning a humble servant into the belle of the ball. Early last week, Disney stock was the worst performer -- year-to-date -- among the components of the Dow 30. Now it could be the most compelling investment in the popular index.
Image source: Disney.
A dream is a wish your stock makes
There were a lot of good things emerging in Disney's fiscal third-quarter report last week. The quarter ended July 2. Disney+ added 14.4 million accounts, its strongest net gain in the past six quarters. Its domestic theme parks are achieving record results, and revenue per capita is up a stunning 40% since its last pre-pandemic fiscal year. Disney is also increasing prices -- in some cases dramatically so -- for all three of its premium streaming services later this year. Talk about putting the plus in the +.
Disney stock is rolling, and rightfully so. The shares are still far removed from last year's all-time high, but are now heading in the right direction. The stock is basically back to where it was when Bob Chapek was introduced as Disney's new CEO 30 months ago, but this isn't a round trip to nowhere.
Disney is better now. Changes to its theme park monetization strategy are making each guest through its turnstiles 40% more valuable than before. Three years ago, Disney's entire media networks division generated just $6.7 billion in revenue for its fiscal third quarter. Now those linear networks are generating $7.2 billion in revenue, with more than $5 billion on top of that from its premium streaming platforms.
You don't have to like everything that Disney is doing, and it's fair to say that it has polarized some of its fans with its recent social and political actions. However, it's hard to argue with the surging stock price.
NYSE: DIS
Key Data Points
A lot can go wrong, of course. Subscribers might flinch at the higher price points of Disney+, Hulu, and ESPN+. Any kind of global economic setback could derail Mickey and Minnie's runaway railway of monetization. Linear networks are already facing the slow drain of cable and satellite television viewers, but what happens if the advertising spigot goes dry, too? We're back at the movies, but this year Disney's studio isn't the top moneymaker.
There are so many moving parts to Disney. It doesn't need for everything to go right. However, the media stock can't fail to fire on too many of its cylinders at the same time. It has come too far to get back to where it is right now -- finally a market darling -- to go back to where it was before. The royal ball is going so well. Don't let it be midnight.
