Just because a business is popular among consumers, it doesn't always mean that the stock is a winner. That's certainly been the case with Walt Disney (DIS 1.09%). The media and entertainment giant's shares have tanked 44% in the past five years (as of Feb. 27).
Should you buy the dip? Here are three things Disney investors need to know so that they can be better informed.
Image source: Walt Disney.
The business is in the middle of a transition
When the company launched Disney+ in November 2019, it was the beginning of the end of the company's once-lucrative cable TV networks. The world has rapidly moved to streaming video entertainment in the past decade. For Disney, it might have been hard to admit that the industry was entering a new phase.
Disney+ has scaled up quickly. As of Sept. 27, 2025, it had 131.6 million global subscribers, making it one of the few platforms that can compete with Netflix. The overall direct-to-consumer segment's (including Disney+ and Hulu, but excluding Hulu Live TV) profitability has also improved dramatically. Operating income increased from $261 million in the first quarter of fiscal year 2025 to $450 million in Q1 of fiscal year 2026 (ended Dec. 27, 2025).
The biggest question now is whether or not earnings from streaming can more than offset the cable TV declines. Cable TV posted a year-over-year operating income drop of 14% in fiscal 2025.
Bringing characters, stories, and franchises to life
The experiences segment is one area of the Disney empire that continues to flex its muscles. It represented 38% of the company's entire revenue base in Q1 2026, but 72% of the operating income. This is the most important moneymaking operation.
Disney's parks and cruises are competitively advantaged, as the market faces massive barriers to entry for newcomers. The business owns unparalleled intellectual property that it can leverage when developing attractions. And there is growth potential, something the leadership team is eager to capture via heightened capital investments.
NYSE: DIS
Key Data Points
Is now a good time to buy Disney stock?
It can definitely be discouraging seeing Disney's share performance in the past five years. However, investors must focus on the positive fundamentals already mentioned. The company is in strong shape today.
The consensus view among Wall Street analysts is that earnings per share will grow at a compound annual rate of 11.3% between fiscal 2025 and fiscal 2028. This forecast looks conservative, given that net income is up about fourfold just in the past three years.
Investors can buy the stock right now by paying a forward price-to-earnings ratio of 17.6. Disney is a high-quality business trading at a multiple below the market average. This is a favorable setup.
