Warner Bros. Discovery, Inc. - Series A (WBD)
Fair ValueFundamental
38
Price
$30.94
Market Cap
$77.32B
Part 1 · What the company is worth
Overview
Warner Bros. Discovery makes and distributes movies, television series and news, and sells access to them through three channels: the HBO Max streaming service, a film and television studio that also licenses content to other platforms, and a family of cable and satellite networks including CNN, TNT and Discovery. The company is in the process of splitting into two separate public companies — one built around streaming and the studio, the other around the television networks — expected to close in 2026.
How it makes money
Revenue comes from three sources with different economics: subscriptions and advertising on streaming and on linear networks, licensing and box-office receipts from the studio, and affiliate fees that cable and satellite operators pay to carry the networks. Linear networks still generate the largest share of revenue and profit, but that share is shrinking as viewers cut the cord; streaming has only recently become profitable, after years of investment in content and technology.
Revenue by segment
Cable and satellite television networks — CNN, TNT, Discovery and others — plus the affiliate fees and advertising they generate. Still the largest segment, but declining.
Film and television production and licensing, including sales of content to other streaming platforms and traditional television syndication.
The HBO Max subscription service: subscription fees plus advertising on the ad-supported tier, now profitable after years of losses.
Competitive moat
Patents and licences · NarrowWarner Bros. owns a large library of franchises — DC characters, Harry Potter, decades of HBO original series — that a new entrant cannot replicate. But owning good content is not the same as controlling how viewers watch it: Netflix, Disney and Amazon compete for the same subscribers with libraries and streaming scale of their own, so the advantage is real but not decisive.
What drives demand
Moderately cyclicalAdvertising revenue on the networks moves with the broader ad market and can swing sharply in a downturn. Subscription revenue from streaming and affiliate fees from pay-TV operators are steadier, but the pay-TV base itself shrinks every year as households cancel cable — a structural decline layered on top of the ordinary advertising cycle.
Key risks
- Linear television in structural decline — Revenue from the Global Linear Networks segment fell 12% in 2025 as households keep cancelling pay-TV subscriptions and advertisers follow viewers elsewhere. The decline is expected to continue regardless of the economic cycle.
- Execution risk of the planned separation — The company intends to split into two public companies by 2026. Separations of this size carry one-time costs, potential disruption to operations and financing, and no guarantee that either resulting company performs better than the combined one.
- High debt load — The company carries substantial debt inherited from the 2022 merger. Servicing it leaves less room to invest in content or to absorb a prolonged downturn in advertising or subscriptions.
- Streaming competition from better-capitalized rivals — HBO Max competes for the same subscribers as Netflix, Disney+ and Amazon Prime Video, all of which can outspend Warner Bros. Discovery on content and technology.
- Rising cost of sports and content rights — Live sports and marquee programming keep networks and streaming relevant, but rights costs have risen faster than the revenue they generate, pressuring margins across the linear and streaming businesses.
The case for
Buyers argue that the split will let investors value the fast-growing, now-profitable streaming and studio business separately from the declining but cash-generative networks, that the content library remains one of the deepest in the industry, and that streaming losses are already behind the company.
The case against
Sellers fear that linear network revenue is falling faster than streaming can replace it, that the separation could saddle one or both resulting companies with debt they cannot easily service, and that larger, better-funded streaming rivals will keep outspending Warner Bros. on content.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
No editorial profile for this company yet
No competitor list for this company yet.
Balance Sheet & Liquidity
Revenue
$36.12B
Trailing 12 months (through 6/30/2026)
Net Income
$-3.17B
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$3.09B
Total Equity
$35.92B
Total Liabilities
$62.92B
Current Ratio
0.78
Interest Coverage
0.57
Debt/EBITDA
4.99
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$26.63
Current Price
$30.94
Margin of Safety
-16.2%
Fair Value Range
$22.68 - $30.58
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
106.34
ROE
2.0%
P/B Ratio
2.37
P/FCF
35.65
Gross Margin
-
ROIC
-1.2%
Profitability Radar
Value Creation (Economic Moat)
ROIC
-1.2%
WACC
11.1%
ROIC − WACC
-12.3 pp
ROIC is below the cost of capital — the company is destroying value for every dollar invested.
Fundamental Analysis Criteria
Passed (9)
- EPS shows upward trend
- P/B Ratio 2.37
- Debt/Equity ratio
- Positive Free Cash Flow
- Current Ratio
- Debt/EBITDA
- Revenue Growth 5Y 28.4%
- Share Dilution 2.4%
- Piotroski F-Score 6/9
Failed (14)
- Price CAGR 1.16%
- ROIC -1.2%
- P/FCF 35.65
- Operating Margin -3.5%
- CapEx intensity
- Interest Coverage
- Return on Tangible Assets
- Low reliance on intangibles
- Price below Graham Number
- DCF valuation (Overvalued)
- ROE -9.2%
- Analyst Consensus 28% Buy
- Earnings Surprise avg -23.5%
- Net Margin Trend -8.8% vs 2.0%
Unavailable (4)
- Gross Margin NaN%
- Dividend Payout NaN%
- PEG Ratio (need PE > 0 and growth > 0)
- Earnings Quality (OCF/Net Income)
Piotroski F-Score
Mixed signals: some areas need attention
Earnings Quality
Low quality: investigate accounting
Share Dilution
Issuing new shares, diluting ownership
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. David M. Zaslav | President, CEO & Director | 65 |
| Dr. Gunnar Wiedenfels Ph.D. | Senior EVP & CFO | 48 |
| Mr. Bruce L. Campbell | COO and Chief Revenue & Strategy Officer | 58 |
| Ms. Priya R. Aiyar J.D. | Chief Legal Officer | 50 |
| Mr. Jean-Briac Perrette | President and CEO of Global Streaming & Games | 54 |
| Ms. Lori C. Locke | Chief Accounting Officer & Executive VP | 62 |
| Mr. Avi Saxena | Chief Technology Officer | - |
| Mr. Dave Duvall | Chief Information Officer | - |
| Peter Lee | Senior Vice President of Investor Relations | - |
| Mr. Robert Lane Gibbs | Chief Communications & Public Affairs Officer | 54 |
Audit Risk
3
Board Risk
9
Compensation Risk
10
Shareholder Rights Risk
10
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-27
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-08-06
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-08-06
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for WBD, sourced from Markets Gazette.
- 1d agoNEUTRALParamount Set to Raise $42.4 Billion Through Bond Offerings
Warner Bros. Discovery Inc. is the target of a significant financial maneuver as Paramount Skydance Corp. prepares to raise $42.4 billion through a combination of investment-grade and high-yield bond offerings. This substantial capital infusion is earmarked to facilitate Skydance's acquisition of WBD. The tightening spreads on the largest portion of this transaction indicate increasing investor confidence in its completion. While the news directly impacts WBD's ownership structure and future strategic direction, the immediate market signal for WBD's stock remains neutral as the transaction is still pending.
- 2d agoNEUTRALParamount Kicks Off High-Grade Bond Sale for Warner Bros. Deal
Paramount Global has initiated the sale of investment-grade bonds, aiming to raise a significant portion of the $52 billion debt package required for its acquisition of Warner Bros. Discovery Inc. This move signals progress in the potential merger, which could reshape the media landscape. Investors will be watching the bond sale's reception and the eventual terms of the acquisition closely. The success of this debt issuance is crucial for Paramount's financing strategy and its ability to complete the transaction, while Warner Bros. Discovery shareholders await clarity on the deal's final structure and valuation.
- 10d agoPOSITIVEParamount Settles Lawsuits With States Clearing the Way to Buy WBD
Paramount Global has reached settlements with 12 states regarding antitrust concerns, effectively clearing a major hurdle for its proposed acquisition of Warner Bros. Discovery Inc. This resolution removes significant legal impediments, paving the way for the potential merger. The agreement also includes a commitment from Paramount to release 30 films annually from the combined studio operations. For investors in Warner Bros. Discovery, this development signals a higher probability of the deal closing, potentially leading to a favorable valuation outcome.
- 8/26/2026NEUTRALBuyers Circle Warner Assets Amid Paramount Legal Fight
Paramount Global is reportedly exploring various strategies to resolve legal challenges surrounding its proposed $110 billion acquisition. This includes considering options to settle lawsuits that question the validity of the deal. Warner Bros. Discovery, as a party involved in the potential transaction, faces uncertainty regarding its future ownership structure. While no immediate impact is confirmed, the ongoing legal battles and strategic considerations by Paramount create a complex environment for WBD investors, with potential outcomes ranging from deal continuation to significant restructuring.
- 8/6/2026NEUTRALWarner Bros. Revenue Falls, But Focus Is on Planned Merger
Warner Bros. Discovery Inc. announced a revenue decline, attributed to the loss of NBA broadcasting rights and underperforming summer films. However, the market's attention is primarily focused on the impending acquisition by Paramount Skydance. This strategic shift overshadows the immediate financial results, suggesting that future valuation will be heavily influenced by the terms and integration of the merger rather than current operational performance. Investors are awaiting further details on the deal's structure and potential synergies.
- 8/6/2026POSITIVEParamount-Warner Deal Cleared by UK Antitrust Watchdog
The UK's antitrust watchdog has approved Skydance Corp.'s $110 billion takeover of Warner Bros. Discovery Inc., clearing a significant regulatory hurdle. Regulators concluded the proposed merger does not pose competition concerns within Britain. This approval is a crucial step for Skydance's ambitious acquisition, potentially paving the way for the deal's finalization. Investors will be watching for further regulatory decisions in other jurisdictions and the strategic integration plans post-merger, which could unlock significant synergies and reshape the media landscape.
- 8/6/2026NEGATIVEWarner Bros. Sales Fall on Loss of NBA Rights, Weak Movie Lineup
Warner Bros. Discovery Inc. has reported a significant decline in sales, attributed to the loss of lucrative National Basketball Association (NBA) broadcasting rights and a weaker performance from its recent movie releases compared to the previous year. This dual impact of lost revenue streams and underperforming content is a clear headwind for the company. Investors will be closely watching management's strategy to offset these losses and revitalize growth in upcoming quarters, particularly concerning future content investments and potential new media rights acquisitions.
- 7/29/2026NEGATIVEWarner Bros. Deal Collapse Would Cost the Ellisons $9.8B
The potential collapse of the Skydance Media deal to acquire Paramount Global would impose a significant financial burden of $9.8 billion on the Ellison family. This figure represents the potential cost if the transaction fails, highlighting the substantial financial risk involved for the key stakeholders. For investors in Warner Bros. Discovery, the uncertainty surrounding this deal and the potential financial repercussions for major players could signal ongoing volatility and a lack of clear strategic direction, potentially impacting the stock's near-term performance.
via Markets Gazette