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On Disney Plus Day, Netflix becomes more Valuable than Disney

On Disney Plus Day, Netflix becomes more Valuable than Disney

Disney and Netflix are very different companies, with very little investment base, but they are a dominant competitor in the streaming wars.

Netflixs market value rose above Disney for the first time in about a year on Friday ironically, it came on Disney Plus Day the Mouse House company-wide marketing event designed to punch up excitement and subscriber signups for two-year-old streaming service.

The streamers stock price has risen more than a quarter of the year. Disney shares have slipped one-third in the same year, yielding resuscending 93 billion dollars.

The company reported a 7% drop on Thursday, followed by the media conglomerate posted quarter results that missed Wall Street targets. In the period, the company's net gain of only 2.1 million Disney Plus subscribers the slowest growth since launching two years ago and well under analyst estimates. execs said the service is still on target to hit the long-term target of 230 million-260 million shit Disney plus customers by September 2024.

Wall Street analysts remain bullish on Disney's multiyear trajectory since the last 18 months, despite the loss in the most recent quarter. Disneys streaming strategy has boosted its stock price over the past 18 years, giving it closer to a Netflix-like valuation. Since March 2020, the shares are up about 85% (but down 10% year-to-date in 2021).

The analysis notes were written on Thursday, while the analyst stated that the company's overweight rating was based on the view that Disney is one of a shortlist of global streaming platforms that can achieve significant scale and profitability. The theory is that combined growth at its parks and the move to an earnings mix to shift away from legacy media earnings, the ratio of the adjusted earnings per share is projected to increase from $2 for fiscal year 2021 to $10 in FY2025, according to Morgan Stanleys model.

According to Michael Nathanson, investors are ignoring the fact that streaming businesses are not rated by the multi-million dollar value of revenue.

When it comes to the re-valuing of the company's value, one would expect it to produce a 3% to 5% free cash flow yield (or $9 billion to $15 billion) if it'd been able to.

According to Nathanson, The internal licensing of content and the shared cost of sports rights across linear and streaming is virtually impossible. A true sum-of-the-parts valuation for Disney is, according to Tom, virtually unattainable.