How the Streaming Subscriber Dip Impacts Disney’s Current Value in 2025

If you are staring at Walt Disney stock and wondering what move to make, you are far from alone. With a closing price of $112.53, it is easy to see why some investors are trying to read between the lines lately. The past week brought a modest decline of 1.7% in the share price, while a broader 30-day dip of 4.6% might have some questioning if the magic is still alive. Yet if we zoom out, Disney’s stock is up an impressive 22.7% over the last year, suggesting that long-term sentiment remains positive, even though the five-year return is still in negative territory.

Some of these ups and downs tie back to recent headlines. Disney’s streaming woes, with reports of 1.7 million subscribers lost across Disney+, Hulu, and ESPN in just one week, have certainly weighed on short-term confidence. Leadership uncertainty also grabbed the spotlight, as speculation swirls over who will eventually take the reins from CEO Bob Iger. But the return of key programming like “Jimmy Kimmel Live!” to network lineups can inject a little optimism, as can news that legal matters are being handled proactively, such as the cease and desist towards Character.AI.

Here is where it gets especially interesting for value-minded investors: by our numbers, Disney performs well against valuation criteria, earning a value score of 3 out of 6. That means Disney is currently undervalued by half of the checks we use. Intrigued? Next, we will walk through what these valuation approaches actually mean and, at the end, reveal an even smarter way to think about Disney’s true worth.

Why Walt Disney is lagging behind its peers

Approach 1: Walt Disney Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by forecasting its future cash flows and then discounting them back to today's value. For Walt Disney, this means evaluating all of the cash the company is expected to generate over the next decade and translating those future billions into what they are worth right now.

Currently, Walt Disney's Free Cash Flow stands at $13.0 billion. Analyst estimates are available for the first five years, with long-term projections for annual free cash flow growth continuing out to 2035. By 2030, forecasts suggest Disney's Free Cash Flow could reach as high as $13.5 billion. The majority of these future values are based on extrapolations after analyst coverage ends, which provides a comprehensive long-term outlook.

Based on this DCF model, the intrinsic value per share for Disney is calculated at $106.44, compared to its current market price of $112.53. This suggests the stock is about 5.7% above its DCF fair value, indicating a slight overvaluation according to this approach.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Walt Disney.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Walt Disney's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Walt Disney Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular and reliable valuation metric, especially for profitable companies like Walt Disney. It measures how much investors are willing to pay for each dollar of earnings, making it a useful tool for benchmarking against the market and sector. PE ratios are influenced by growth expectations and risk. Companies with stronger growth prospects or lower perceived risks typically justify higher PE ratios, while higher risks or slower growth translate into lower multiples.

Currently, Walt Disney trades at a PE ratio of 17.5x. For context, the Entertainment industry as a whole commands an average PE of 28.2x, and Disney’s peer group average is 83.8x. While Disney’s multiple is well below both of these benchmarks, it is important to remember that broad averages can be skewed by outliers and may not account for company-specific factors.

That is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio estimates what a justifiable PE should be for Walt Disney, factoring in not only the company’s earnings growth and profitability, but also its industry, market cap, risks, and profit margins. This more nuanced approach is considered superior to simple peer or industry comparisons because it tailors the benchmark to the specific company’s circumstances, offering a more meaningful yardstick for valuation.

For Walt Disney, the Fair Ratio is calculated at 25.7x, while its actual PE sits at 17.5x. This significant gap indicates Disney trades well below what would be expected for a company of its profile, suggesting undervaluation on a PE basis.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Walt Disney Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a concise story or thesis that supports your view of what a company is truly worth. It connects your assumptions about Disney’s future, such as revenue, profit margins, and major business shifts, to a financial forecast and ultimately a fair value estimate.

Unlike traditional valuation models, which can feel abstract, Narratives make your investment logic visible and actionable. They link your perspective on Disney’s story, whether it is about global expansion, digital integration, or creative risk-taking, directly to future numbers and a calculated fair value.

Accessible directly on Simply Wall St’s Community page, Narratives are a user-friendly tool trusted by millions of investors. They allow you to compare your Fair Value to Disney’s current share price, helping you decide when it is time to buy or sell.

What’s more, Narratives update dynamically as fresh news or earnings data comes in, ensuring your decisions reflect the latest information. For example, some investors may see Disney’s fair value as high as $152.0, banking on rapid growth in cruises and digital, while others are cautious, with targets as low as $79.0, factoring in streaming risks and rising costs. Narratives empower you to anchor your investment decisions to the story you believe in, making valuation personal and responsive.

Do you think there's more to the story for Walt Disney? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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