The Motley Fool·2026-02-08 13:25Core Insights - The streaming industry is highly competitive, with multiple players vying for viewer attention, and one notable competitor to Netflix is experiencing significant streaming profits despite a 48% decline in stock value from its peak as of February 5 [1][2] Company Overview - Disney launched its streaming service, Disney+, in November 2019, entering the market significantly later than Netflix, which began streaming in 2007 [4] - Disney's direct-to-consumer (DTC) streaming operations, including Hulu and ESPN+, faced a cumulative operating loss of $4.6 billion in fiscal years 2020 and 2021, leading to investor skepticism about the segment's viability [5] Financial Performance - Disney's DTC division reported an operating profit of $1.3 billion in fiscal 2025, with expectations of $500 million in the current quarter (Q2 2026), marking a $200 million increase from the previous year [6] - The stock is currently trading at a forward price-to-earnings ratio of 16.2, which is below the S&P 500's multiple of 22.2, indicating a potential undervaluation [10] Market Position - Disney has a competitive advantage in the streaming market due to its extensive intellectual property portfolio, including popular franchises like Pixar, Star Wars, and Marvel, which appeal to a broad audience [6][7] - The bundling strategy of Disney+, Hulu, and ESPN is a key focus for management, aimed at reducing customer churn and enhancing subscriber retention [7] Future Outlook - Disney's leadership anticipates double-digit adjusted earnings per share growth for the current fiscal year, suggesting potential for a bull run if streaming profits continue to rise as the company transitions from losses to significant income [10]