QS Research · Michael Burry's Scion Capital analyst template · 2006
Walt Disney Co (DIS)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -20% · upside +16%
Using Section 13's TTM to Jun 27, 2026 base, $8.60B net income at today's 23.4x P/E values equity at about $201.24B, essentially the $201.59B market cap, so the base case is roughly flat at -0.2%. I do not use Section 13's 8.3x-16.0x EV/EBITDA peer range as the scenario driver: that is a relative-valuation exercise, not a non-valuation rerating catalyst, so I hold today's 23.4x P/E and flex earnings. A 16% higher net-income case, using FY2026 adjusted EPS growth guidance of ~16% including the 53rd week, gives +15.8%; a 20% lower net-income case, reflecting Sports weakness, Asia parks softness and linear erosion, gives -20.1%. The operating story is better than the GAAP headline -- Q3 FY2026 segment operating income rose 21%, adjusted EPS was $2.06 vs $1.61, and buybacks are targeted at least $9B -- but TTM free cash flow of $8.29B is below $8.25B of buybacks plus $2.23B of dividends, and the stock is near its 52-week high, so there is no deep-value margin of safety. Call: pass; neither the long nor short rule is met.
Key numbers
- Share price: $116.75
- Market cap: $201.59B
- Latest financial period: TTM to Jun 27, 2026
- Revenue (TTM): $98.86B
- EV / EBITDA (TTM): 10.2x
- P/E (TTM): 23.4x
- Price / book: 1.83x
The 15 boxes
- ✓ 1. Long-form business notes
Disney's FY2025 10-K shows a three-segment entertainment company: Entertainment (linear networks, DTC, content sales/licensing), Sports (ESPN) and Experiences (parks, cruise, consumer products). Revenue comes from affiliate/subscription fees, advertising, theatrical/TV/VOD licensing, park admissions, resorts, merchandise and licensing; FY2025 XBRL shows revenue of $94.42B and operating income of $17.55B. The oldest report here (FY2020) still had four segments and described the October 2020 reorganization to accelerate DTC; the FY2025 report shows DTC at about 132M Disney+ and 64M Hulu subscribers and subsequent portfolio actions.
- ✓ 2. Competitive advantage
The supplied FY2025 10-K and six-year XBRL do not document a durable competitive advantage. They show large scale and a rising operating-profit record, but the 10-K describes substantial competition in every business and flags consumer-taste, DTC-profitability and IP-rights risks. No peer margins, segment returns, TTM figures or named competitor shares are provided.
- ✓ 3. 10-Q takeaways
Q3 fiscal 2026 revenue rose 7% to $25.248 billion and total segment operating income rose 21% to $5.555 billion, while diluted EPS fell to $1.51 from $2.92 because the prior-year quarter had a $3.3 billion non-cash Hulu tax benefit and the current quarter had a $900 million restructuring/impairment charge, including an $812 million A+E impairment. Adjusted EPS rose to $2.06 from $1.61. Experiences led segment growth with revenue up 10% and operating income up 20%, while Sports operating income fell 17%. Q3 operating cash flow rose 33% to $4.866 billion and free cash flow rose 63% to $3.072 billion; management reiterated numeric FY2026 adjusted EPS growth guidance and targets at least $9 billion of FY2026 buybacks.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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