Buy or Sell Walt Disney Stock?

Walt Disney (DIS) stock has fallen 7.4% during the past day and is currently trading at $104.45. We believe there are a few things to fear in DIS stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors, but before that, for quick background: With $187 Bil in market cap, Walt Disney provides global entertainment through media distribution and operates theme parks and resorts, including locations in Florida, California, Paris, Hong Kong, and Shanghai.

[1] Valuation Looks Moderate

This table highlights how DIS is valued vs broader market. For more details see: DIS Valuation Ratios

[2] Growth Is Weak

• Walt Disney has seen its top line grow at an average rate of 4.3% over the last 3 years
• Its revenues have grown 3.5% from $93 Bil to $96 Bil in the last 12 months
• Also, its quarterly revenues grew 5.2% to $26 Bil in the most recent quarter from $25 Bil a year ago.

This table highlights how DIS is growing vs broader market. For more details see: DIS Revenue Comparison

[3] Profitability Appears Moderate

• DIS last 12 month operating income was $14 Bil representing operating margin of 14.2%
• With cash flow margin of 16.3%, it generated nearly $16 Bil in operating cash flow over this period
• For the same period, DIS generated nearly $12 Bil in net income, suggesting net margin of about 12.8%

This table highlights how DIS profitability vs broader market. For more details see: DIS Operating Income Comparison

[4] Financial Stability Looks Strong

• DIS Debt was $47 Bil at the end of the most recent quarter, while its current Market Cap is $187 Bil. This implies Debt-to-Equity Ratio of 24.9%
• DIS Cash (including cash equivalents) makes up $5.7 Bil of $202 Bil in total Assets. This yields a Cash-to-Assets Ratio of 2.8%

[5] Downturn Resilience Is Weak

DIS has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• DIS stock fell 60.7% from a high of $201.91 on 8 March 2021 to $79.32 on 4 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $124.01 on 30 June 2025 , and currently trades at $104.45

2020 Covid Pandemic

• DIS stock fell 42.1% from a high of $148.20 on 2 January 2020 to $85.76 on 23 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 24 November 2020

2008 Global Financial Crisis

• DIS stock fell 57.3% from a high of $36.55 on 8 May 2007 to $15.59 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 21 April 2010

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read DIS Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.