Investment Thesis
Disney demonstrates solid operational profitability with 17.7% operating margins and reasonable debt management (0.33x D/E), but faces concerning cash flow deterioration with negative free cash flow of -2.3B despite 3.4% revenue growth. The company's weak liquidity position (0.67x current ratio) and declining net income (-7.6% YoY) despite revenue growth suggest operational challenges that warrant monitoring before further commitment.
DIS Strengths
- Strong operating margin of 17.7% demonstrates pricing power and operational efficiency
- Manageable debt-to-equity ratio of 0.33x with solid 10.4x interest coverage provides financial flexibility
- Revenue growth of 3.4% YoY shows resilience in core business operations
- Large asset base of $202.1B with $108.5B equity provides substantial business scale
DIS Risks
- Severe cash flow deterioration with -$2.3B free cash flow and -8.8% FCF margin despite positive operating income signals capital intensity issues or working capital problems
- Weak liquidity metrics (0.67x current ratio, 0.61x quick ratio) below healthy thresholds of 1.0x+ raise concerns about short-term obligations coverage
- Net income declining 7.6% YoY while revenue grows 3.4% YoY indicates margin compression and operational leverage deterioration
- Very low ROE of 2.2% and ROA of 1.2% suggest inefficient capital deployment relative to asset base
Key Metrics to Watch
- Free cash flow trend - critical to understand whether -$2.3B is temporary or structural
- Operating cash flow sustainability and capital expenditure requirements for streaming/content
- Net margin recovery - need to identify cause of income decline despite revenue growth
- Current ratio improvement - liquidity must strengthen to above 1.0x for comfort
- Return on equity expansion - currently 2.2% is significantly below cost of capital
DIS Financial Metrics
DIS Profitability Ratios
DIS Balance Sheet & Liquidity
DIS 5-Year Financial Trend
5-Year Trend Summary: Walt Disney Co's revenue has grown significantly by 36% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.29 reflects profitable operations.
DIS Growth Metrics (YoY)
DIS Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $24.7B | $2.4B | $1.34 |
| Q3 2025 | $23.2B | $2.6B | $1.43 |
| Q2 2025 | $22.1B | -$20.0M | $-0.01 |
| Q1 2025 | $23.5B | $1.9B | $1.04 |
| Q3 2024 | $22.3B | -$460.0M | $-0.25 |
| Q2 2024 | $21.8B | -$20.0M | $-0.01 |
| Q1 2024 | $23.5B | $1.3B | $0.70 |
| Q3 2023 | $21.5B | -$460.0M | $-0.25 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
DIS Capital Allocation
DIS SEC Filings
Access official SEC EDGAR filings for Walt Disney Co (CIK: 0001744489)