Forget Disney: Buy and Hold This Great Streaming Media Stock

There is no doubt about it: Walter Disney. One of the world's most influential media and entertainment companies. Its nearly 100-year history is filled with great stories and unforgettable moments.

The "House of Mouse" has won countless fans through its infrared entertainment. ConsiderationAgainst this background, the company In November 2019Launched its own flagship product, Disney+. Streaming Service(math.) genusheartening The With 111.3 million users as of December 30, 2023, it has easily become one of the most popular choices on the market.

But if you're looking for a gorgeous streaming media stock to add to your portfolio, forget Disney. Buy and hold this industry leader.

Where's the growth?

Streaming media businesses of note are not Netflix (NASDAQ: NFLX)none other than It now has 260.3 million users after a net increase of 29.5 million users in 2023. After a net increase of 29.5 million users in 2023, it now has 260.3 million users. Even though the user base is already very large, the company is still looking for ways to increase the number of members.

This is in stark contrast to Disney+. Yes, it has more than 111 million users in less than five years, which is commendable. However, there are signs that it has already peaked.

In the most recent fiscal quarter (Q1 2024, which ended December 30), subscribers to Disney+ Core (excluding Hotstar) were down 1% YoY. Kouguan cited higher prices as the reason more members are choosing to cancel their plans.

Pricing power is where Netflix really excels. Last October, Netflix raised the price of its basic plan in the U.S. by $2 per month. However, that didn't stop the company from adding a net 2.8 million subscribers in the U.S. and Canada in the fourth quarter, while average revenue per member grew by 3%.

Here, the consumer is a great inspiration for investors, and Netflix is the streaming media of choice, even if its prices keep going up. Netflix is the streaming media of choice, even if its prices keep rising. This is something that Disney+ has not been able to compete with so far.

Disney is still in the red

When it comes to profitability, Netflix has once again bypassed Walt Disney. Disney's Direct Tooth Consumer (DTC) business, also known as Disney+ and its stake in Hulu, posted an operating loss of $138 million in the last fiscal quarter. The loss was down from a loss of nearly $1 billion in the first quarter of fiscal 2023. Disney is implementing a broader program across the business to cut expenses by approximately $7.5 billion by the end of the fiscal year.

But we cannot ignore the fact that the DTC division continues to lose money. "Goon's stratum in 2024financial year It was written in the first quarter financial report:"We continue to anticipate that the post-labeling streaming media business will be 2024financial yearFourth Quarter Realized Earnings We will see. We shall see.

But let me introduce you to just how far behind Disney's DTC business is.Netflix exist 2023Business Revenues of US$33.7 billion were realizedOperating incomeNearly 70 The company's profit margin is 21%, or $100 million, and even better, it's climbing steadily as time goes on. Koon believes that this year's operating margin will reach 24%.

As a forerunner in the streaming wars, Netflix has already achieved a scale of growth that even Disney can't hope to match: Netflix will generate $6 billion in free cash flow by 2024, and it has solved the problem of profitability that has plagued other streaming competitors. It's cracked the profitability problem that's plagued other streaming competitors.

Netflix shares have surged 1,78% over the past 18 months, so the stock isn't as cheap as it once was. Investors can buy the stock at a forward price-to-earnings ratio of 36.9. That's a premium of 441 TP3T to Disney, but it could be worth it for investors who want to own the best company in the streaming media industry.

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Neil Patel has no position in any of the stocks mentioned above.The Motley Fool holds recommendations for Netflix and Disney.The Motley Fool has a disclosure policy.

Forget Disney : The Motley Fool originally posted this story.