Disney Stock Price Reflects Slower Growth, Not Financial Woes
Walt Disney's stock price has dropped about 7% over the past year while the S&P 500 gained 17%. The company trades at 21.3 times earnings, just under the median of 22.5 for the S&P 500.
Despite this, Disney's business performance is strong. In fiscal Q3 2026, revenue rose 7%, and total segment operating income increased by 21%, exceeding management's prior guidance.
The company generates significant cash flow, with close to $8.3 billion in free cash flow over the past twelve months. Management has also raised its buyback program, funded by cash set aside for the OpenAI deal and expected A&E proceeds.
However, Disney's revenue growth of 4% per year over the last three years lags behind the S&P 500 median of 8.3%. The company's operating margin is also lower than the market median at 15.2%.