What’s Happening With Warner Bros. Discovery Stock?
Warner Bros. Discovery (NASDAQ:WBD) has staged a strong comeback in 2025, with its stock now trading near $18 after a wave of positive earnings surprises, studio wins, and meaningful progress in streaming profitability. That’s a sharp rebound from the single-digit levels where it started the year, rewarding early believers in the turnaround. But the question now is: after doubling already, can WBD climb further — perhaps to the $25–30 range — or has much of the upside already been captured? But if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Separately, see – Opendoor – OPEN Stock To $3?
Core Thesis: The Path to $25–30
Streaming & Studio Strength vs. Legacy Drag
In Q2 2025, WBD reported $9.81 billion in revenue, slightly ahead of expectations, with the streaming unit swinging to a $293 million profit versus a $107 million loss a year earlier. It also added 3.4 million new subscribers globally, a sign that “Max” is resonating in international markets. At the same time, blockbusters like A Minecraft Movie (nearing $1B global box office) and other strong studio releases lifted the film segment.
Today, investors are valuing WBD at roughly 9–10× forward earnings, a discount to both Netflix (25–30×) and Disney (15–20×). If WBD can scale streaming to 150 million subscribers by 2026, while holding studio margins and gradually stabilizing cash flow from its linear networks, earnings could move toward $2–2.50 per share. Even a conservative 12–15× multiple on that would justify a stock price in the $25–30 range — further upside of 50–80% from current levels.
Key Growth Drivers
- Streaming Subscriber Expansion – International rollout of Max and growth in ad-tier subscribers boost scale and ARPU.
- Hit Content Pipeline – Studio successes like Minecraft demonstrate WBD’s ability to generate outsized box office profits.
- Restructuring Unlock – The separation into “Streaming & Studios” and “Global Linear Networks” highlights the growth side of the business and sets the stage for possible spin-offs.
- Ad-Supported Streaming Tiers – Hybrid models increase monetization while appealing to price-sensitive consumers.
- Debt Reduction – Continued debt paydown can lower interest burden and improve free cash flow, boosting equity value.
Risks to the Thesis
- Linear TV Decline – Cable networks continue to bleed advertising revenue (double-digit declines in some quarters), weighing on consolidated results.
- High Debt Load – Leverage constrains strategic flexibility and magnifies swings in free cash flow.
- Streaming Competition – Netflix, Disney, Amazon, and Apple remain aggressive, making sustained profitability harder.
- Execution Risk – International streaming rollout, content spend discipline, and cost cuts must all align.
- Cyclicality in Box Office – A weak slate or flops could sharply dent studio earnings.
The Verdict
At $18, WBD has already delivered impressive gains in 2025, but the story isn’t finished. If management continues to scale streaming profitably, deliver big-ticket studio hits, and separate or stabilize the legacy TV business, the math supports a valuation closer to $25–30 per share. That would mark not just another leg higher, but also a validation that WBD can thrive in the streaming-first media landscape.
Still, this is a high-execution, high-competition turnaround. For investors confident in management’s ability to balance content, debt, and profitability, WBD still offers meaningful upside — though at $18, the easy money from distressed levels has already been made.
Investors should be prepared for significant volatility and the potential for substantial losses if market conditions deteriorate or if the company fails to execute on its ambitious growth plans. While the 2x upside potential is mathematically sound based on projected revenues, it requires flawless execution in a rapidly evolving and competitive landscape. Now, we apply a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio, which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. 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.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates