# Warner Bros Discovery (WBD.US)

Canonical: https://gigainvestors.com/s/WBD

Analysis as of: 2026-10-16T07:33:02.035Z. Financial observations: FY2000–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $30.95 per share; close as of 2026-10-06.

Estimated value: low $67.92 per share, central $80.57 per share, high $93.62 per share. Buy at or below the central value $80.57 per share. Valuation as of 2026-10-16T07:33:02.035Z; scenarios are not confidence intervals.

Expected annual return: 22.0% at the stated quote. About 22.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 4

- Operating margin variation: 2.35×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.32×

- FY2017: 0.10×

- FY2018: 0.18×

- FY2019: 0.27×

- FY2020: 0.24×

- FY2021: 0.17×

- FY2022: -0.22×

- FY2023: -0.04×

- FY2024: -0.26×

- FY2025: 0.04×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 20.1pp below the typical margin (limit 4pp)

- ROIC, median of available years: 11.4%

- ROIC, second-lowest year: -10.1%

- Typical minus recent gross margin: 20.1 pp

- Typical gross margin (annual median): 61.7%

- Recent gross margin (lower of latest and 3-year median): 41.6%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.8%

- ROIC including acquisitions, ten-year median: 17.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 31.6%

- FY2017: 11.2%

- FY2018: 11.5%

- FY2019: 26.6%

- FY2020: 18.1%

- FY2021: 17.3%

- FY2022: -10.1%

- FY2023: -2.4%

- FY2024: -18.6%

- FY2025: 2.2%

### economics: fail

- incremental invested capital return below threshold

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $63B

- Net income, five-year total: -$20B

- Return on incremental invested capital: 0.0%

- Working capital / revenue, annual change: -2.0 pp

- Working capital / revenue, change between three-year averages: -13.6 pp

- Working capital / revenue, final three-year average: 13.2%

Chart: Owner earnings · five years; fiscal year observations.

- FY2021: $5.0B

- FY2022: $13B

- FY2023: $20B

- FY2024: $8.7B

- FY2025: $17B

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- potential debt-funded buybacks (informational)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 11.5% vs -2.4%

- Per-share earnings: 1.60 to -1.28 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 14.6%

- Ordinary dilution, 5-year annual growth: 30.4%

- Market cap gain: $55B

- Cumulative retained earnings: -$17B

- Diluted shares, 10-year annual growth: 14.6%

- Diluted shares, 5-year annual growth: 30.4%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: -$2.88

- Per-share value, starting three-year median: $1.60

- Per-share value, ending three-year median: -$1.28

- Buybacks concentrated in cheaper years (correlation): -0.20

- Average buyback yield: 5.3%

- Buyback history: 4 years

- Debt-funded buybacks: Yes

- Acquisition spending: $74B

- Cumulative net income, 10 years: -$15B

- ROIC, first three-year median: 11.5%

- ROIC, last three-year median: -2.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: $2.01

- FY2017: -$0.59

- FY2018: $0.83

- FY2019: $2.95

- FY2020: $1.81

- FY2021: $1.52

- FY2022: -$3.80

- FY2023: -$1.28

- FY2024: -$4.62

- FY2025: $0.29

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -3.6%

- Receivables to sales index (DSRI): 0.94×

- Restructuring years, last five: 2

- Stock compensation / operating cash flow: 17.8%

- Earnings backed by cash: Yes

- Operating cash / earnings: 5.94×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.49×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -1.2%

- FY2017: -8.7%

- FY2018: -6.1%

- FY2019: -3.9%

- FY2020: -4.5%

- FY2021: -5.2%

- FY2022: -8.7%

- FY2023: -8.6%

- FY2024: -16.0%

- FY2025: -3.6%

## Holders

- [Prem Watsa](https://gigainvestors.com/FFH): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [David Einhorn](https://gigainvestors.com/GLRE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Mark Hillman](https://gigainvestors.com/HCM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Daniel Loeb](https://gigainvestors.com/tp): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to shrink 10.4% a year for ten years · "WBD Q4 Earnings Miss on Linear TV Decline and Studios Weakness" (finance.yahoo.com, Mar 2026) · sales -5.1%

Story as of 2026-10-13T00:24:53.328Z; price observation 2026-10-06.

Price needs cash profits to shrink 10.4% a year for ten years

- 2026-02-26: Warner Bros. Revenue Falls 6% as $31 Bidding War Intensifies ([finance.yahoo.com](https://finance.yahoo.com/news/warner-bros-revenue-falls-6-182725957.html))

- 2026-03-02: WBD Q4 Earnings Miss on Linear TV Decline and Studios Weakness ([finance.yahoo.com](https://finance.yahoo.com/news/wbd-q4-earnings-miss-linear-132700445.html))

- 2026-08-06: Warner Bros. Posts Surprise Quarterly Profit Amid Streaming Gains; Paramount Deal Gets UK Clearance ([finance.yahoo.com](https://finance.yahoo.com/media-advertising/articles/warner-bros-posts-surprise-quarterly-142916853.html))

### Sales · FY2024–2025

sales -5.1%; source https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm; observed 2026-02-27.

- FY2016: $6.5B 

- FY2017: $6.9B 

- FY2018: $11B 

- FY2019: $11B 

- FY2020: $11B 

- FY2021: $12B 

- FY2022: $34B 

- FY2023: $41B 

- FY2024: $39B 

- FY2025: $37B 

### Gross margin · FY2025

gross margin 44%; source https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm; observed 2026-02-27.

- FY2016: 62.6% 

- FY2017: 61.4% 

- FY2018: 62.7% 

- FY2019: 65.7% 

- FY2020: 63.8% 

- FY2021: 62.1% 

- FY2022: 39.6% 

- FY2023: 40.6% 

- FY2024: 41.6% 

- FY2025: 44.0% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in entertainment; annual sales are USD 37.3 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm (filed 2026-02-27); FY2025: revenue 37296000000; grossProfit 16411000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WBD.US: Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Streaming, Studios, and Global Linear Networks. The Streaming segment offers streaming services, such as HBO Max and discovery+, and premium pay-TV services, including HBO and certain premium sports streaming products for mobile and connected TV devices. The Studios segment engages in the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and its networks/streaming services. This segment also distributes films and television programs to various third-party and internal television, streaming services, and physical and digital home entertainment markets; related consumer products and themed experience licensing; and publishes, develops, licenses, and distributes content for the interactive space in platforms, including console, handheld, mobile, and PC-based gaming for both internal and third-party game titles. The Global Linear Networks segment provides general and lifestyle entertainment networks, news networks; and hosts international media networks and global sports networks. In addition, the company offers a portfolio of content and products for television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products under the Discovery Channel, HBO Max, discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, Animal Planet, Science Channel, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Pictures Animation, Warner Bros. Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Espanol, Hogar de HGTV, and other brands. The company was incorporated in 2008 and is based in New York, New York. As of October 6, 2026, Warner Bros. Discovery, Inc. operates as a subsidiary of Skydance Corporation.

### Why customers stay

Margins ranged from 40.6% to 44% during 2023–25; it earns 11.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: grossProfit / revenue = 40.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: grossProfit / revenue = 41.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm (filed 2026-02-27); FY2025: grossProfit / revenue = 44%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); 10-year return on capital observations [[2016,0.31580761598790513],[2017,0.11236185916616796],[2018,0.11519643729608572],[2019,0.2660391994609313],[2020,0.1810780414171402],[2021,0.1725862395888826],[2022,-0.10051445835131635],[2023,-0.02438718940693176],[2024,-0.18620116063247422],[2025,0.022398452102034908]]; median 0.11377914823112684. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 5 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2016: growth capex 0; upkeep 88000000; owner earnings 1223000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2017: growth capex 0; upkeep 135000000; owner earnings 1455000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2018: growth capex 0; upkeep 147000000; owner earnings 2349000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2019: growth capex 0; upkeep 289000000; owner earnings 5980000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2020: growth capex 0; upkeep 402000000; owner earnings 5132000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2021: growth capex 0; upkeep 373000000; owner earnings 4964446115.28822. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2022: growth capex 0; upkeep 987000000; owner earnings 12996000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: growth capex 0; upkeep 1316000000; owner earnings 19567000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: growth capex 0; upkeep 948000000; owner earnings 8724000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm (filed 2026-02-27); FY2025: growth capex 0; upkeep 1231000000; owner earnings 17035000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Dividend observations: [[2016,1111000000],[2017,7838000000],[2018,0],[2019,2000000],[2020,0],[2021,251000000],[2022,300000000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 4.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); WBD.US SharesStats.PercentInsiders = 4.141 percentage points; cache date 2026-10-16.

### What could break it

"We have a significant amount of debt" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm (filed 2026-02-27); We have a significant amount of debt

### What the price says

The price assumes cash profits shrink 10.4% yearly over ten years; actual growth was 14.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Ten-year compound average after fade. Initial solved rate -0.15811445704757993. Price 30.95; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.7839506172839505 → FY2025 6.733201581027668. Closing-price date 2026-10-06.

## Monthly share-price history (USD per share)

- 2016-10: $26.11 per share

- 2016-11: $27.09 per share

- 2016-12: $27.41 per share

- 2017-01: $28.35 per share

- 2017-02: $28.76 per share

- 2017-03: $29.09 per share

- 2017-04: $28.78 per share

- 2017-05: $26.50 per share

- 2017-06: $25.83 per share

- 2017-07: $24.60 per share

- 2017-08: $22.21 per share

- 2017-09: $21.29 per share

- 2017-10: $18.88 per share

- 2017-11: $19.02 per share

- 2017-12: $22.38 per share

- 2018-01: $25.07 per share

- 2018-02: $24.32 per share

- 2018-03: $21.43 per share

- 2018-04: $23.65 per share

- 2018-05: $21.09 per share

- 2018-06: $27.50 per share

- 2018-07: $26.58 per share

- 2018-08: $27.83 per share

- 2018-09: $32.00 per share

- 2018-10: $32.39 per share

- 2018-11: $30.72 per share

- 2018-12: $24.74 per share

- 2019-01: $28.38 per share

- 2019-02: $28.90 per share

- 2019-03: $27.02 per share

- 2019-04: $30.90 per share

- 2019-05: $27.26 per share

- 2019-06: $30.70 per share

- 2019-07: $30.31 per share

- 2019-08: $27.60 per share

- 2019-09: $26.63 per share

- 2019-10: $26.95 per share

- 2019-11: $32.94 per share

- 2019-12: $32.74 per share

- 2020-01: $29.26 per share

- 2020-02: $25.70 per share

- 2020-03: $19.44 per share

- 2020-04: $22.42 per share

- 2020-05: $21.75 per share

- 2020-06: $21.10 per share

- 2020-07: $21.10 per share

- 2020-08: $22.07 per share

- 2020-09: $21.77 per share

- 2020-10: $20.24 per share

- 2020-11: $26.91 per share

- 2020-12: $30.09 per share

- 2021-01: $41.42 per share

- 2021-02: $53.03 per share

- 2021-03: $43.46 per share

- 2021-04: $37.66 per share

- 2021-05: $32.11 per share

- 2021-06: $30.68 per share

- 2021-07: $29.01 per share

- 2021-08: $28.84 per share

- 2021-09: $25.38 per share

- 2021-10: $23.44 per share

- 2021-11: $23.27 per share

- 2021-12: $23.54 per share

- 2022-01: $27.91 per share

- 2022-02: $28.05 per share

- 2022-03: $24.92 per share

- 2022-04: $18.15 per share

- 2022-05: $18.45 per share

- 2022-06: $13.42 per share

- 2022-07: $15.00 per share

- 2022-08: $13.24 per share

- 2022-09: $11.50 per share

- 2022-10: $13.00 per share

- 2022-11: $11.40 per share

- 2022-12: $9.48 per share

- 2023-01: $14.82 per share

- 2023-02: $15.62 per share

- 2023-03: $15.10 per share

- 2023-04: $13.61 per share

- 2023-05: $11.28 per share

- 2023-06: $12.54 per share

- 2023-07: $13.07 per share

- 2023-08: $13.14 per share

- 2023-09: $10.86 per share

- 2023-10: $9.94 per share

- 2023-11: $10.45 per share

- 2023-12: $11.38 per share

- 2024-01: $10.02 per share

- 2024-02: $8.79 per share

- 2024-03: $8.73 per share

- 2024-04: $7.36 per share

- 2024-05: $8.24 per share

- 2024-06: $7.44 per share

- 2024-07: $8.65 per share

- 2024-08: $7.84 per share

- 2024-09: $8.25 per share

- 2024-10: $8.13 per share

- 2024-11: $10.48 per share

- 2024-12: $10.57 per share

- 2025-01: $10.44 per share

- 2025-02: $11.46 per share

- 2025-03: $10.73 per share

- 2025-04: $8.67 per share

- 2025-05: $9.97 per share

- 2025-06: $11.46 per share

- 2025-07: $13.17 per share

- 2025-08: $11.64 per share

- 2025-09: $19.53 per share

- 2025-10: $22.45 per share

- 2025-11: $24.00 per share

- 2025-12: $28.82 per share

- 2026-01: $27.54 per share

- 2026-02: $28.17 per share

- 2026-03: $27.46 per share

- 2026-04: $27.05 per share

- 2026-05: $27.01 per share

- 2026-06: $26.66 per share

- 2026-07: $26.30 per share

- 2026-08: $28.53 per share

- 2026-09: $30.95 per share

- 2026-10: $30.95 per share

## Annual estimated value (USD per share)

- FY2016: low $21.86 per share, central $24.84 per share, high $28.80 per share

- FY2017: low $36.54 per share, central $39.83 per share, high $44.22 per share

- FY2018: low $31.45 per share, central $35.64 per share, high $41.21 per share

- FY2019: low $38.63 per share, central $43.69 per share, high $50.43 per share

- FY2020: low $41.43 per share, central $46.76 per share, high $53.85 per share

- FY2021: low $86.35 per share, central $97.62 per share, high $112.62 per share

- FY2022: low $79.16 per share, central $89.86 per share, high $104.10 per share

- FY2023: low $89.01 per share, central $101.11 per share, high $117.23 per share

- FY2024: low $77.41 per share, central $93.06 per share, high $108.11 per share

- FY2025: low $69.93 per share, central $82.88 per share, high $96.24 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1437107/000143710726000020/wbd-20251231.htm); period 2025-12-31, filed 2026-02-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.