Netflix (WKN: 552484) and Walt Disney (WKN: 855686) is in a head-to-head race. Although we can say for now: The American media and leisure group and former stalker is now way ahead. Both in terms of growth with over 12 million net new customers, but also in terms of the number of subscribers.
We can of course go into the details. Netflix itself has more subscribers than Disney+. However, it is important to look across the group. Nevertheless, it is noteworthy that the stocks perform differently. The former top dog could surprise, while the current top dog messed with the numbers. Was there another changing of the guard? Or is the market just acting a little irrationally?
Walt Disney vs. Netflix: Which Stock Is Better?
Business-oriented, the starting point is quite simple. Netflix is now the stalker and the pure play. While Walt Disney is the top dog as he owns a large theme park segment, cruise lines and more. When it comes to content, I think we can score equal points. The American media and leisure group has grown historically. Whereas the streaming pioneer invests in many new formats and is particularly active on its platform and produces popular content. At least in terms of range, I tend to see an advantage in the older group.
But let’s look at the fundamental valuation. Netflix is currently priced at a share price of $256. Based on the most recently reported earnings per share at $11.54, the price-to-earnings ratio would be 22.2. Walt Disney, on the other hand, trades at around 25 times earnings on an adjusted basis, although from a value perspective I’m inclined to also price in the possibility that earnings per share stock again may top $6. In this case, the price-to-earnings ratio wouldn’t even be 14.
In terms of the price-to-sales ratio, Walt Disney is now quite cheap at around 2.5, while Netflix comes in at around 4. The wider group is therefore cheaper. The theme park division is more of a turnaround segment than a clearly significant growth market. But also the profitable core, which recently did not deliver as originally assumed.
In the end, we can therefore say: Walt Disney simply owns more, and at a more favorable valuation. Does Netflix appear more attractive just because it’s pure play and can generally scale? Decide for yourself.
Not so different…
In general, I tend to rate Walt Disney and Netflix the same way. Fundamentally, and when assessing the currently very short-term price-to-earnings ratio, I see more upside in Disney stock. Nevertheless, I am happy to have both stocks in my portfolio. I remain convinced of the streaming market in the medium to long term.
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Vincent owns shares in Netflix and Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney and recommends the following options: long the January 2024 $145 call on Walt Disney and short the January 2024 $155 call on Walt Disney.