Investment Thesis
Disney demonstrates solid operational efficiency with an 18% operating margin and strong debt management (0.35x D/E), but declining net income (-7.6% YoY) and weak liquidity ratios (0.68x current ratio) signal operational headwinds and short-term funding pressure. The low free cash flow margin (5.2%) and capital-intensive business model limit cash generation, warranting a cautious stance pending clarity on profitability stabilization.
Strengths
- Strong operating margin of 18.0% demonstrates operational efficiency across diverse business segments
- Conservative leverage with 0.35x debt-to-equity ratio and robust 10.0x interest coverage provides financial flexibility
- Substantial operating cash flow of $7.6B supports capital investment and financial obligations
Risks
- Net income declining 7.6% YoY despite stable revenue signals margin compression or operational challenges
- Current ratio of 0.68x and quick ratio of 0.62x both below 1.0 indicate potential short-term liquidity constraints
- Free cash flow margin of only 5.2% on $51.1B revenue reveals limited cash-generation efficiency relative to company scale
Key Metrics to Watch
- Net income trend reversal and revenue growth acceleration
- Free cash flow improvement and working capital management
- Current ratio recovery toward 1.0+ to address liquidity concerns
Financial Metrics
Revenue
51.1B
Net Income
4.6B
EPS (Diluted)
$2.61
Free Cash Flow
2.7B
Total Assets
205.2B
Cash
5.7B
Profitability Ratios
Gross Margin
N/A
Operating Margin
18.0%
Net Margin
9.1%
ROE
4.3%
ROA
2.3%
FCF Margin
5.2%
Balance Sheet & Liquidity
Current Ratio
0.68x
Quick Ratio
0.62x
Debt/Equity
0.35x
Debt/Assets
0.0%
Interest Coverage
10.05x
Long-term Debt
38.5B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T09:57:02.611805 |
Data as of: 2026-03-28 |
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