Warner Bros. Discovery (WBD, Financial) has revealed its strategy to revamp its streaming platform, Max, by rebranding it back to HBO Max during the upcoming summer. The company highlighted the strong growth of its streaming division, which has dramatically improved profitability by nearly $3 billion over two years and expanded its global reach by gaining 22 million subscribers over the last year. WBD is optimistic about growing its subscriber base to over 150 million by the end of 2026.
By reinstating the HBO brand into HBO Max, WBD aims to enhance the service's appeal and highlight the distinctive content that subscribers enjoy. The move underscores the company's commitment to continually refining its strategy, utilizing extensive consumer data and insights to secure a competitive edge. This approach reflects WBD’s adaptability and focus on creating a successful and popular streaming service.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 24 analysts, the average target price for Warner Bros. Discovery Inc (WBD, Financial) is $13.14 with a high estimate of $24.00 and a low estimate of $8.00. The average target implies an upside of 44.62% from the current price of $9.09. More detailed estimate data can be found on the Warner Bros. Discovery Inc (WBD) Forecast page.
Based on the consensus recommendation from 29 brokerage firms, Warner Bros. Discovery Inc's (WBD, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Warner Bros. Discovery Inc (WBD, Financial) in one year is $10.08, suggesting a upside of 10.95% from the current price of $9.085. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Warner Bros. Discovery Inc (WBD) Summary page.
WBD Key Business Developments
Release Date: May 08, 2025
- Streaming Subscribers: Over 5 million subscribers gained in Q1, totaling more than 22 million over the last 12 months.
- Streaming EBITDA: Delivered $339 million in Q1.
- Future EBITDA Goal: On track to deliver at least $1.3 billion in 2025, an 85% increase versus 2024.
- Studio EBITDA Goal: Progress towards $3 billion in EBITDA.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Warner Bros. Discovery Inc (WBD, Financial) gained over 5 million subscribers in Q1 2025, contributing to a total of more than 22 million new subscribers over the last 12 months.
- The company delivered $339 million in EBITDA for the quarter and is on track to achieve at least $1.3 billion in EBITDA in 2025, an 85% increase from 2024.
- WBD's commitment to high-quality storytelling is driving cultural influence and financial success, with standout content like The White Lotus and The Last of Us.
- The company's global streaming service is growing, with plans to surpass 150 million subscribers by the end of next year.
- WBD's strategy of leveraging IP-based blockbusters and new originals is gaining traction, as evidenced by the success of A Minecraft Movie and Sinners.
Negative Points
- There is uncertainty around the leverage ratio that global linear networks can handle, which could impact future capital structures.
- The company faces challenges in finding a profitable business model for streaming premium sports rights.
- WBD's traditional business side is experiencing a decline, which is not yet fully offset by the growth in streaming and ad revenue in the US.
- The company anticipates a $300 million cost increase in 2025 due to overlap between outgoing and incoming sports rights.
- There is macroeconomic uncertainty affecting advertising channels, which could impact future financial performance.
