Shares of Walt Disney (NYSE:DIS) have been tanking in recent weeks and are now the cheapest they've been in nearly a year. The company released its fourth-quarter earnings on Nov. 10 and investors were discouraged with the results.
The entertainment company's earnings per share of $0.37 were well below analyst expectations of $0.57 and revenue also missed -- $18.53 billion versus $18.79 billion. Plus, its 2.1 million new Disney+ subscribers put it at 118.1 million in total, which was also far below what some analysts were looking for.
Year to date, the stock has fallen more than 15% while rival Netflix (NASDAQ:NFLX) has soared by 26%. But could this be an ideal time to load up on Disney? Even at lower price targets, several analysts see the stock rising to over $200. And its forward price-to-earnings multiple of 36 looks cheap compared to Netflix, which trades at 64 times its future earnings. Investors are also paying just four times revenue for Walt Disney compared to 11 for Netflix.
Disney is, of course, more than just a streaming company and it could be a solid reopening play as its theme parks benefit from a continued increase in traffic. Its parks, experiences, and products segment generated $5.5 billion in revenue for the period ending Oct. 2 – double what it did in the same period last year. And that's still without the economy being fully back to normal.
Given its relatively low valuation and the opportunities ahead for Disney, this could be an excellent stock to buy on the dip.
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