Warner Bros. Discovery Falls 17% YTD: How Should You Play the Stock?

Warner Bros. Discovery WBD shares have dipped 16.7% year to date, underperforming the broader Zacks Consumer Discretionary sector’s return of 10.9%. WBD shares have also lagged the Zacks Broadcast Radio and Television industry’s growth of 44.3% and its peers Netflix NFLX, Fox FOXA and Townsquare Media TSQ. Over the same time frame, shares of NFLX and FOXA have gained 79.1% and 54.2%, respectively, while shares of Townsquare fell 6.2%.During the nine months ended Sept. 30, 2024, WBD revenues fell 6% year over year to $29.29 billion due to the sluggish performance of the Studio segment. Theatrical and Games revenues decreased for the said period due to overall lower box office revenues. Warner Bros. Discovery is suffering from the sluggish performance of its Advertising segment due to a fall in the audience in domestic general entertainment and news networks and soft linear advertising markets in the United States, and to a lesser extent, certain international markets, as well as exiting the AT&T SportsNet business.However, the increasing international and domestic clientele, expanding portfolio offering and growing partner base bodes well for investors.Warner Bros. Discovery, Inc. Price and Consensus Warner Bros. Discovery, Inc. price-consensus-chart | Warner Bros. Discovery, Inc. QuoteWBD Benefits From Expanding Partner BaseWarner Bros. Discovery is benefiting from an expanding partner base that includes the likes of the National Basketball Association (NBA) and Charter Communications.Warner Bros. Discovery recently announced an extended 11-year partnership with the NBA to win the league’s broadcasting rights and has resolved disputes regarding NBA media agreements. The partnership aims to promote NBA content and drive international growth of TNT sports and digital brands like Bleacher Report and House of Highlights. WBD has received a portfolio of live game rights in several territories internationally, enabling it to enhance its market reach.Warner Bros. Discovery partnered with Charter Communication, the largest distributor of pay-TV in the United States, to ink a strategic distribution agreement to provide 57 million Charter customers free access to WBD’s Max and Discovery+ streaming platforms.Further, Charter signed a deal with WBD to increase its overall fee for broadcasting Warner Channels.WBD’s 2024 Earnings Estimates Not So BrightFor 2024, the Zacks Consensus Estimate for revenues is pegged at $39.76 billion, indicating a year-over-year decline of 3.79%. The consensus mark for 2024 loss is pegged at $4.37 per share compared with the loss of $4.50 over the past 30 days.The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at 7 cents, up 75% over the past 30 days. The consensus mark for fourth-quarter 2024 revenues is pegged at $10.52 billion, indicating year-over-year growth of 2.31%. WBD’s earnings beat the Zacks Consensus Estimate in only one of the trailing four quarters, missing in the remaining three quarters, the average negative surprise being 525.45%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.WBD – To Buy, Hold or Sell?WBD believes that the expanding clientele will help drive top-line growth, driven by an expanding customer base and subscriber revenues.However, declining ad sales and distribution revenues due to a fall in audience in domestic general entertainment and news networks and soft linear advertising markets in the United States remain headwinds.WBD shares are undervalued, as suggested by a Value Score of B. WBD currently has a Zacks Rank #3 (Hold), which implies that investors may want to wait for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Netflix, Inc. (NFLX): Free Stock Analysis Report Warner Bros. Discovery, Inc. (WBD): Free Stock Analysis Report Fox Corporation (FOXA): Free Stock Analysis Report Townsquare Media, Inc. (TSQ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks