Warner Bros. Discovery Stock Jump Looks Great, But How Secure Is That Gain?
Warner Bros. Discovery (WBD) stock is up 29.3% in 21 trading days. The rally reflects renewed optimism around acquisition bids and strategic review, but big moves like this often invite a tougher question: is the stock truly resilient when markets reverse?
Before judging its downturn reslience, let’s look at where Warner Bros. Discovery stands today.
- Size: Warner Bros. Discovery is a $59 Bil company with $38 Bil in revenue currently trading at $23.69.
- Fundamentals: Last 12 month revenue growth of -4.3% and operating margin of 3.7%.
- Liquidity: Has Debt to Equity ratio of 0.57 and Cash to Assets ratio of 0.04
- Valuation: Warner Bros. Discovery stock is currently trading at P/E multiple of 121.1 and P/EBIT multiple of 15.9
- Has returned (median) 80.4% within a year following sharp dips since 2010. See WBD Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside Low valuation – making the stock Risky. For details, see Buy or Sell WBD Stock
That brings us to the key consideration for investors chasing this rally: how resilient is WBD stock if markets turn south? This is where our downturn resilience framework comes in. Suppose WBD stock falls 20-30% to $17 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
2022 Inflation Shock
- WBD stock fell 88.5% from a high of $77.27 on 19 March 2021 to $8.87 on 28 December 2022 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 $23.69 on 18 November 2025 $23.69
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -88.5% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- WBD stock fell 44.0% from a high of $32.77 on 16 January 2020 to $18.36 on 3 April 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 6 January 2021
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -44.0% | -33.9% |
| Time to Full Recovery | 278 days | 148 days |
2018 Correction
- WBD stock fell 45.0% from a high of $29.62 on 21 February 2017 to $16.28 on 14 November 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 12 September 2018
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -45.0% | -19.8% |
| Time to Full Recovery | 302 days | 120 days |
2008 Global Financial Crisis
- WBD stock fell 64.9% from a high of $14.74 on 5 October 2007 to $5.18 on 24 October 2008 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 16 September 2009
| WBD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -64.9% | -56.8% |
| Time to Full Recovery | 327 days | 1480 days |
Feeling jittery about WBD stock? Consider portfolio approach.
Smart Investing Begins With Portfolios
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
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.