WBD Rises 20% in a Month: How Should You Play the Stock?

Core Viewpoint - Warner Bros. Discovery (WBD) has experienced a significant increase in share price, driven by a growing subscriber base and strong content offerings, despite facing challenges in linear TV and studio performance [1][5]. Group 1: Subscriber Growth and Content Strategy - WBD's Direct-to-Consumer (D2C) segment, particularly the Max streaming platform, has shown impressive performance, contributing to long-term growth through strategic partnerships and original content [2]. - The partnership with Disney's Hulu has enhanced Max's market position and subscriber acquisition, with Max now available in 65 markets and boasting 110 million global subscribers [3]. - Popular titles such as House of the Dragon, The Penguin, and Dune: Prophecy are attracting a broad audience, while localized content offerings in international markets are enhancing global appeal [4]. Group 2: Financial Performance and Estimates - The Zacks Consensus Estimate for WBD's fourth-quarter 2024 revenues is $10.52 billion, reflecting a year-over-year growth of 2.31%, with earnings estimated at 7 cents per share [6]. - For the full year 2024, revenue estimates stand at $39.76 billion, indicating a year-over-year decline of 3.79%, with a projected loss of $4.37 per share [7]. Group 3: Challenges and Market Competition - WBD's linear television business is facing challenges due to a shift towards digital and on-demand content, impacting its performance in the United States [5]. - The company is also experiencing inconsistent performance in its Studios business, with underperforming films contributing to market pressures from competitors like Netflix and Amazon [5].