To The Moon

🌟🌟🌟The Global Streaming Industry has been expanding rapidly in recent years with key players like $Netflix(NFLX)$  $Walt Disney(DIS)$  $Amazon.com(AMZN)$  vying for dominance.  However Netflix and Disney stand out as 2 major players.

Netflix versus Disney - Which is a Better Buy?

Disney has celebrated its 100th Anniversary in 2023.  Disney is one of the largest entertainment companies in the world producing movies, TV shows, games, music and operating theme parks, hotels and even cruise ships.  From timeless animated classics to blockbuster franchises like Star Wars and Marvel Heros, Disney has brought countless hours of entertainment joy with its passion in story telling from Mickey Mouse, Cinderella to Captain America where the good will prevail in the end.

Netflix has a massive library of original content and is one of the world's leading entertainment services with  260 million paid memberships in over 190 countries.  Its members enjoy TV series, films and games across a wide variety of genres and languages.  Members can play, pause and resume watching as much as they want, anytime, anywhere and can change their plans at any time.

Compared to S&P500 Index which is up almost 10% year todate, Disney has gained 31% year todate while Netflix is up 34%.  In 2023 Netflix has gained 81% while Disney is up 19%.

Today the Disney Board of Directors led by CEO Bob Iger can heave a big sigh of relief as Activist Nelson Peltz was not successful in his bid to win a place in the Disney Board of Directors.  

In Disney's first quarter of fiscal 2024, dilutes Earnings Per Share increased by 49% year on year to USD 1.04 per share while revenue remained consistent with prior year period at USD 23.5 billion.

In Q1, Disney+ Core subscriptions fell by 1.3 million.  However Disney expects a net addition of 5.5 million to 6 million subscribers in the 2nd quarter.

For its combined streaming businesses, Disney expects to be profitable by the 4th quarter of fiscal 2024 as it works to reduce costs.  Disney expects earnings to grow by 20% to  USD 4.60 per share in fiscal 2024.

Wall Street Analysts are bullish on Disney with a Target price of USD 126, an upside potential of 6% according to Tipranks.

Netflix  is a new player in comparison to Disney, having started in 1997 and was once known for its DVD by mail service in the early days.  With a vast library of original content and licensing agreements with major studios, Netflix has 260.8 million paid members worldwide as of the end of 2023.

Despite Netflix's subscription price increase and crackdown on password sharing, revenue has  risen by 12.5% year on year to USD 8.8 billion.  Earnings increased from 12 cents per share in the previous year quarter to USD 2.11 per share in Q423.

Netflix's focus on emerging markets where streaming adoption is increasing, could lead to further growth in the coming years.  Netflix also intends to expand its advertising business to increase long term revenue and profits.

Netflix's management believes the entertainment space is a USD 600 billion opportunity across Pay TV, films, games and branded advertising.  Netflix only accounts for 5% currently.  This means that Netflix has lots of exponential growth ahead.

Netflix's Management predicts double digit revenue growth in 2024.  Analysts forecast that Netflix's revenue and earnings will rise by 14% and 42% respectively.

Wall Street Analysts are bullish on Netflix with target price of USD 725.00, an upside potential of 15%.

While Netflix has experienced rapid growth as a result of subscriber expansion, Disney has demonstrated resilience in the face of competition due to its diverse revenue streams.

I like both Disney and Netflix but I believe that Disney is a better buy due to its various sources of revenue while Netflix seems rather overpriced at the current valuation.   Let's hope for the Happily Ever Ending for Disney as it continues its passion for story telling. 

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