With a storied history that spans more than 100 years, coupled with intellectual property that industry peers can only dream of having, Walt Disney (DIS 0.12%) has been a leader in the media and entertainment landscape for some time. However, it hasn't been a winning investment recently. The company's share price is down 50% in the past five years and 16% just in 2026 (as of April 7).
It's a good time to think in a contrarian manner, though. Here are three reasons you should buy the dip on this consumer discretionary stock in April.
Image source: The Motley Fool.
1. Experiences segment brings in high-margin and growing revenue
Disney's experiences segment consists of its theme parks and cruise ships. This is a lucrative operation, raking in $10 billion in operating income on $36.2 billion in revenue in fiscal 2025 (ended Sept. 27, 2025). The operating margin of 28% is stellar.
In September 2023, management revealed a plan to spend $60 billion over the coming 10 years on capital expenditures to add new attractions at parks and expand the cruise fleet. Clearly, the leadership team sees huge growth potential. There are 1,000 acres of land available for development just at the existing parks.
From a competitive standpoint, this might be Disney's best segment. There's pricing power, high barriers to entry, and durable growth thanks to limitless intellectual property that can be leveraged.
2. Financial success for streaming operations stands out
The second reason investors should buy the dip on Disney is the success of the entertainment segment's streaming operations, which include Disney+ and Hulu (excluding Hulu Live TV). From sizable losses not that many years ago, these platforms are now contributing to the company's bottom line.
During first-quarter 2026 (ended Dec. 27, 2025), these direct-to-consumer streaming services brought in $450 million in operating income, up 72% year over year. Compared to the operating margin of about 5% reported in fiscal 2025, management expects a 10% margin this fiscal year, which should result in another year of tremendous growth. What was once a financial headwind has now turned into a money-making tailwind.
NYSE: DIS
Key Data Points
3. The stock's dip presents a compelling valuation
Disney's operational transition in the past several years, as the business depends less on legacy cable networks and more on direct-to-consumer services, has driven the investment community to pressure the stock price. After all, the uncertainty might be hard to stomach.
But this introduces a compelling valuation. Right now, investors can buy this stock at a forward price-to-earnings ratio of 14.4. This represents a 29% discount to the overall S&P 500 index. Given the previously discussed success of Disney's experiences and streaming operations, which are the future of the business, April is the time to buy the dip on the stock.
