Can Paramount+ Lift Paramount Skydance Stock While The Warner Deal Sits In Court?
Paramount Skydance (PSKY) stock is down 42% over the past year and trades about 47% below its 52-week high. Since 2010, its only rally of more than 30% inside two months came in 2025. The strongest case for another is Paramount+, where subscriber growth sped up between the first and second quarters of 2026, though management expects subscribers to stay relatively flat in the third. That case has to outlast a court fight over Warner Bros. Discovery.
What Is Changing Inside Paramount+?
The change shows in underlying subscriber additions, which leave out the international hard bundles Paramount+ is exiting. Those bundles brought in average revenue of less than $1 per subscriber, and management calls them uneconomic. Underlying additions were about 2 million in the first quarter of 2026 and 4 million in the second, nearly double.
Management credits the content. Dutton Ranch became the biggest series in Paramount+ history, and UFC and the World Cup added live sports. The service also posted its best retention quarter ever in the second quarter of 2026.
Price is doing even more of the work. Paramount+ revenue rose 17% in the first quarter and 16% in the second. About two-thirds of the second-quarter gain came from higher revenue per subscriber, which management ties to pricing actions and a better subscriber mix. Subscribers are paying more, and more of them are signing up.
Is Paramount+ Big Enough To Move The Whole Company?
Not yet. By the CEO’s account, most of the company’s revenue still comes from the linear business. Management ties its raised full-year adjusted EBITDA outlook, now $3.8 billion to $3.9 billion, to second-quarter results at or above the top of its guidance and to cost savings. The company is tracking to more than $2.7 billion of run-rate efficiencies by the end of 2026.
Streaming profit moves the other way in the second half of 2026. Management expects direct-to-consumer profit to fall year on year, mostly in the third quarter, as costs for its sports portfolio and new originals are amortized. It also expects Paramount+ subscribers to be relatively flat from the second quarter to the third, without saying how much reflects bundle exits.
So the proof is revenue. Management guides third-quarter 2026 revenue growth for the whole company of 4% to 7% and calls it an acceleration from the second quarter. It expects streaming and Studios both to grow faster.
What Does The Warner Deal Cost While You Wait?
In July a coalition of states led by California won a temporary court pause of Paramount’s $110 billion acquisition of Warner Bros. Discovery. Management says the trial is set for March 2027. If the deal closes after September 30, 2026, the merger agreement adds a ticking fee for WBD shareholders of about $650 million per quarter, payable only at closing and funded with additional equity.
Each quarter of that fee equals nearly 6% of Paramount Skydance’s market value of about $11.4 billion.
On the company’s own numbers, the Paramount+ upside is real. Watch third-quarter revenue against the 4% to 7% guide, then the March 2027 trial, because every quarter past September 30 adds to the equity bill at closing. Other stocks trading well below their highs sit on our dip-buying screen.
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