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- WBD stock fell 2.93% in a week and 21.09% in six months.
- The recent drop made Warner Bros. one of the worst S&P 500 performers.
The ongoing strike in Hollywood led Warner Bros. Discovery, Inc. to delay three big-budget films. Investors aren’t happy, and WBD stock fell 3.39%. Warner Bros. has to delay its three upcoming big-budget movies: Dune: Part Two, Godzilla x Kong: The New Empire, and Lord of the Rings: The War of the Rohirrim. The market hoped these movies could be blockbusters, as the past few releases did not perform well as expected.
Warner Bros. Discovery Inc. (WBD Stock) – Financial Analysis
The delay in release caused WBD’s stock price to decline, making it one of the worst performers in the S&P 500 index on August 25, 2023. Warner Bros. lost 1.8 Million subscribers in the last three months after the rival HBO Max launched its streaming platform as Max.
WBD had around 95.8 Million subscribers globally, which contracted to 97.6 Million by the end of Q1 2023. CEO Gunnar Wiedenfels refers to this drop as the “overlapping subscriber bases between Max and Discovery Plus trend.” The recent drop also saw a decline in 82% of trading volume.
Sales in Q1 2023 were $10.7 Billion, which dropped to $10.36 Billion in Q2, while the sales growth fell from (-) 2.82% to (-) 3.18%, respectively. Gross income declined from $1.92 Billion to $1.82 Billion, while gross income growth suffered from 3.50% to (-) 6.86%, respectively. Net income growth stumbled from 49.01% to (-) 15.09% between Q1 & Q2.
Warner Bros. Discovery Inc. (NASDAQ: WBD) fell 2.93% in a week, 5.62% in a month, 21.09% in six months, and 9.51% in a year. It also rallied 9.85% in three months and 27.15% YTD.
Warner Bros. Discovery Inc. (NASDAQ: WBD) – Technical Analysis
At press time, WBD stock is trading at $12.27, declining 3.39%; previous close and open were at $12.70 and $12.66, respectively. The 52-week range is from $8.82 to $16.34, suggesting a further drop could create a new low. With an average volume of 20.22 Million shares, the market cap is $29.907 Billion.
The trailing twelve-month (TTM) earnings per share (EPS) is negative $2.59, suggesting weak financials. Analysts predicted the price target to be at $20.72 with a whopping 68.9% upside and placed a 2.64 rating for moderate buy.
Warner Bros. released Q2 earnings on August 3, 2023, where the reported revenue of $10.358 Billion failed to beat the expected value of $10.438 Billion by 0.76%. In comparison, the reported earnings of negative $0.51 per share also failed to exceed the estimated value of negative $0.35 by 45.85%. Despite the negative earnings report, WBD stock gained nearly 18% around the earnings period.
Compared to the previous quarter, the revenue gained 5.40% while the EPS jumped by 23%. The subsequent earnings will be announced on November 2, 2023. Herein, the revenue shall be $10.137 Billion while the EPS will be $0.011, a sizeable jump from the previous quarter. The (TTM) revenue is $41.89 Billion and the year-over-year (YoY) quarterly revenue growth is 5.40%.
Warner Bros. Discovery Inc. (WBD) Stock – Candle Exploration
The recent drop from the breakout failure point of $14.42 is crucial as it caused the price to fall below the 200EMA and 50EMA. If the next candle is bullish and has crossed the previous one, it could be a price reversal point. Also, if the price breaks the 50EMA and 200EMA in the coming sessions, it could try to break the $14.42 barrier.
The price action recovered during the supposed bulls’ trap but failed to rally. Price will have to sustain above the $14.42 mark to be strong enough to break the selling zone. The price is expected to bounce off the buying zone if it crosses the immediate support at $10.90.
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