With the year soon coming to an end, now is an excellent time to consider your investment goals for 2023. After a stock market sell-off this year, many stocks will ring in the new year at bargain prices. Companies across multiple industries have suffered significant dips in their shares over the last year as consumer spending has slowed. But that doesn't mean they don't have excellent potential in the long term. 

Warner Bros. Discovery (WBD -2.37%) and Netflix (NFLX 1.46%) have each suffered because of declines in the entertainment industry and are selling at bargain prices. As a result, an investment of $5,000 could see substantial gains over the coming years with 2023 an excellent time to buy.

1. Warner Bros. Discovery

As one of the hardest-hit stocks, Warner Bros. Discovery shares have fallen 56% since April, when the company officially entered the market with the merger between Warner Media and Discovery. The entertainment company is home to popular brands such as Harry Potter, Game of Thrones, and the DC superheroes, but is in a transition that will require patience from investors. 

Warner Bros. has failed to impress investors this year. Most recently, third-quarter revenue declined 11% year over year to $9.82 billion, which contributed to its net loss of $2.3 billion. The weak results for the quarter stemmed primarily from macroeconomic headwinds facing its three core segments: networks, studios, and direct-to-consumer.

Despite its struggles this year, Warner Bros. Discovery's price-to-earnings (P/E) ratio is just over 13, suggesting its financials aren't in as much trouble as its stock price would have you think. And the company's stock has an average 12-month price target of $20.74, or 83% above its current price of $11.33. That means a $5,000 investment in Warner Bros. could be worth $9,150 in a year's time. 

With multiple DC films set to be released in 2023, the highly anticipated multi-console launch of its Harry Potter-themed video game Hogwarts Legacy in February, and the coming merger of its streamers HBO Max and Discovery+, Warner Bros. Discovery could start as a bargain but provide significant gains for those willing to wait. 

2. Netflix 

As a founding member of the streaming industry, Netflix enjoyed over a decade of dominance and profound growth. In fact, despite steep declines in 2022, the stock has still risen 60% over the last five years. 

The company has undergone a transformative year as its reign at the top of the industry has been challenged by the introduction of such heavy hitters as Walt Disney's Disney+, HBO Max, and Apple TV+. As a result, Netflix lost over a million subscribers in the first half of the year, which has sent its shares falling 48% year to date. 

But it has made significant progress in the latter half of the year, adding 2.4 million new memberships in the third quarter and bringing in $7.9 billion in revenue, a year-over-year rise of 5.9%. Net income during the quarter also hit $1.3 billion as subscriptions skyrocketed.

Additionally, Netflix has shifted its business to maximize profits. Recent and coming reforms, such as introducing a low-priced ad-supported tier and cracking down on password-sharing, are positive steps toward raising its average revenue per subscription and attracting budget-conscious members. 

Moreover, on Nov. 15 Bank of America double-upgraded its recommendation on Netflix stock from sell to buy with a price target of $370, implying a rise of 20%. The bank cited the company's expansion of its subscription tiers and its venture into advertising for the expected growth.

The upgrade, along with Netflix's P/E of about 28, make the company's stock an absolute bargain and an excellent choice for an investment of $5,000 in 2023.