A strong performer from today's morning trading session is Warner Bros. Discovery, whose shares rose 1.5% to $20.62 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Warner Bros. Discovery Has an Attractive P/B Ratio but a Worrisome P/E Ratio:
Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Warner Bros. Discovery has a trailing 12 month P/E ratio of 66.5 and a P/B ratio of 1.42.
Warner Bros. Discovery has moved 177.4% over the last year compared to 16.2% for the S&P 500 — a difference of 161.2%. Warner Bros. Discovery has a 52 week high of $21.22 and a 52 week low of $7.25.
Increasing Revenues but Narrowing Margins:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,144 | $10,671 | $12,191 | $33,817 | $41,321 | $39,321 |
| Operating Margins | 27% | 24% | 17% | -22% | -4% | -26% |
| Net Margins | 19% | 11% | 8% | -22% | -8% | -28% |
| Net Income (M) | $2,069 | $1,219 | $1,006 | -$7,371 | -$3,126 | -$11,311 |
| Net Interest Expense (M) | $677 | $648 | $633 | $1,777 | $2,221 | $1,996 |
| Depreciation & Amort. (M) | $1,347 | $1,359 | $1,582 | $7,193 | $7,985 | $1,102 |
| Diluted Shares (M) | 711 | 672 | 664 | 194 | 2,436 | 2,450 |
| Earnings Per Share | $2.91 | $1.81 | $1.52 | -$37.99 | -$1.28 | -$4.62 |
| EPS Growth | n/a | -37.8% | -16.02% | -2599.34% | 96.63% | -260.94% |
| Avg. Price | $29.03 | $23.83 | $34.22 | $22.64 | $11.38 | $20.33 |
| P/E Ratio | 7.35 | 10.18 | 16.61 | -1.55 | -8.82 | -4.38 |
| Free Cash Flow (M) | $3,110 | $2,337 | $2,425 | $3,317 | $6,161 | $4,427 |
| CAPEX (M) | $289 | $402 | $373 | $987 | $1,316 | $948 |
| EV / EBITDA | 9.93 | 10.44 | 11.58 | -593.21 | 16.72 | -13.5 |
| Total Debt (M) | $29,620 | $30,138 | $28,840 | $97,268 | $83,778 | $76,262 |
| Net Debt / EBITDA | 6.44 | 7.24 | 6.94 | -528.46 | 12.43 | -7.95 |
| Current Ratio | 1.61 | 1.99 | 2.1 | 0.93 | 0.93 | 0.89 |
