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Back of Napkin

The Walt Disney Company DIS

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Disney's Entertainment segment grew operating income 64% last quarter and Sports fell 17%.

A year earlier the company reported $2.92 of earnings per share, of which roughly $1.80 was a one-time tax benefit from buying the rest of Hulu.

DIS · price with moving averages

Daily · 6MWeekly · 3Y
$76$89$102$115$128 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Three businesses that share a castle. Entertainment is the studios, the television networks and Disney+, which spent five years losing money and now does not. Sports is ESPN, which is a toll on live rights that keep getting more expensive while the audience paying the toll keeps shrinking. Experiences is the parks, the cruise ships and the consumer products, and it is where the money actually is.

The character library is what makes all three work. A film becomes a ride becomes a cruise itinerary becomes a doll, and the same intellectual property earns four times. Nobody else has that stack, which is why Experiences earns a 30% margin selling people a day out.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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