QS Research · Michael Burry's Scion Capital analyst template · 2006
Walt Disney Co (DIS)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case 0% · downside -22% · upside +18%
Base is the TTM to Jun 27, 2026: $23.77B EBITDA and $40.86B net debt on 1,726.69M shares (N12, N20, N19, N5). At today's 10.2x EV/EBITDA the equity is $201.59B, or $116.75/share, so the base case is 0%; at 8.1x-8.6x peer EV/EBITDA equity is $151.7B-$163.6B, or $87.8-$94.7/share (-25% to -19%), and at 11.5x-12.0x it is $134.7-$141.5/share (+15% to +21%) (S1, N24, N20, N19, N5, N1). The business is better than FY2020 - secular revenue is $65.39B then versus TTM $98.86B, TTM EBIT is $18.24B, DTC has about 132M Disney+ and 64M Hulu subscribers, and Experiences was 54% of Q3 FY2026 operating income - but the market already pays a premium 10.2x EV/EBITDA and 23.4x P/E versus peers at 8.1x-9.6x and 7.8x-14.1x (S22, S24, S28, S1, N10, N11, N24, N26). With roughly 1:1 risk/reward and no margin of safety, this is a pass, not a long or short; I need a lower price or a clear FCF inflection before the asymmetry improves. I am not normalizing earnings over a cycle: the call uses TTM EBITDA/EBIT, not averaged FY2020-FY2025 earnings.
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 earns money in three FY2025 segments — Entertainment (linear networks, Disney+/Hulu DTC, content sales/licensing), Sports (ESPN channels plus the new ESPN DTC plans) and Experiences (parks, cruise, consumer products) — versus four segments reported in FY2020, a reorganization done to push the DTC strategy. Scale and profitability have grown every year in the six-year XBRL window: revenue $65.39B in FY2020 to $94.42B in FY2025 and operating income $8.11B to $17.55B, with FY2020's -$2.86B net loss the Covid trough. The mix moved from linear affiliate/advertising toward subscription DTC (approximately 132M Disney+ and 64M Hulu paid subscribers at September 27, 2025) and toward heavy parks/cruise capital spend (capex $8.02B in FY2025 vs $4.97B in FY2023).
- ✓ 2. Competitive advantage
DIS shows a durable but uneven competitive advantage: scale and cash generation are large, and operating income was positive every year FY2020-FY2025, with FY2025 revenue of $94.42B and operating income of $17.55B. The advantage is clearest in the scale/IP-licensing and Parks & Experiences complex, but streaming and linear TV face broad competition, industry-wide pay-TV declines, and DTC's history of significant losses. The sources list competitor categories, not named competitor companies, and do not give segment-level margins or returns.
- ✓ 3. 10-Q takeaways
The quarter ended 2026-06-27 (referred to in the risk factors as Q3 fiscal 2026) showed revenue of $25,248 million, up 7% on $23,650 million, with segment operating income up at Entertainment ($1,680 million, +64%) and Experiences ($3,017 million, +20%) but down at Sports ($858 million, -17%). Reported net income attributable to Disney fell 50% to $2,638 million and diluted EPS to $1.51 from $2.92, but that swing is mostly a one-off comparison: the prior-year quarter held a $3,277 million non-cash Hulu tax benefit (+$1.56 EPS), while the current quarter carried $900 million of restructuring and impairment (mostly an $812 million A+E write-down) plus $334 million of acquisition amortization (-$0.55 EPS in total). Revenue growth is partly inorganic—about 2 percentage points of the service revenue increase came from the Fubo and NFL Transactions—and Experiences strength is domestic (domestic Parks & Experiences operating income +27%) with International down 13%.
- ✓ 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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