Buy 2 Streaming Content Giants Amid Solid Earnings Estimate Revisions

Streaming content is an audio or video file on the Internet that can be played without being fully downloaded, significantly reducing wait times for online content, depending on the Internet connection speed. The content creation layer forms the foundation of the streaming ecosystem that typically comprises four categories: film and TV studios, live media producers, game publishers and developers and user-generated content. 

The push for exclusivity on subscription video-on-demand and music platforms has intensified the content wars, forcing streaming firms to spend exorbitant amounts on content creation. As exclusive content remains a key differentiator with evolving competition from the metaverse and immersive digital storytelling, companies are increasingly vying for market share by offering compelling content libraries, unique features and competitive pricing.

Here we recommend two streaming content behemoths that have declared strong earnings results in their last reported quarter. Impressive subscriber additions and solid guidance have resulted in positive estimate revisions. 

These companies are: Netflix Inc. NFLX and The Walt Disney Co. DIS. Each of our picks currently carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our two picks in the past three months.

Netflix Inc.

Zacks Rank #1 Netflix reported second-quarter 2025 adjusted earnings of $7.19 per share, which beat the Zacks Consensus Estimate by 1.7%. The figure jumped 47.3% from the year-ago quarter. Revenues came in slightly above the company guidance at $11.07 billion, increasing 16% year over year, driven primarily by membership growth, higher subscription pricing and increased ad revenues. The figure missed the consensus mark by 0.06%.

The second-quarter content slate wrapped up on a high note as Squid Game S3 (122M views) became the company’s sixth biggest season of any series in just a few weeks of viewing. On April 1, NFLX launched its Ad Suite in the United States and ramped up this Ad Suite in international markets. The ad-supported offerings will enable management to witness impressive subscribers and ARPU (average revenue per user) growth. 

Netflix uses AI, data science and machine language extensively to provide consumers with more appropriate and intuitive suggestions. Netflix's AI platform takes into account an individual’s viewing habits and hobbies and accordingly provides recommendations. AI applications enable NFLX to offer a high-quality streaming service at reduced bandwidths.  

Solid Guidance 

NFLX raised its full-year 2025 revenue forecast to $44.8-$45.2 billion from the previous range of $43.5-$44.5 billion. The increase in revenues stems from multiple growth drivers working in tandem. Member growth accelerated toward the end of the second quarter, exceeding internal forecasts, while NFLX’s advertising business continues to gain traction with expectations to roughly double ad revenues in 2025.

Attractive Estimate Revisions 

For 2025, the Zacks Consensus Estimate currently shows revenues of $45.03 billion, suggesting an improvement of 15.5% year over year and earnings per share of $26.06, indicating an increase of 31.4% year over year. The Zacks Consensus Estimate for current-year earnings has improved 2.4% over the last 30 days.

For 2026, the Zacks Consensus Estimate currently shows revenues of $50.82 billion, suggesting an improvement of 12.8% year over year and earnings per share of $32.16, indicating an increase of 23.4% year over year. The Zacks Consensus Estimate for current-year earnings has improved 3.1% over the last 30 days.

The Walt Disney Co.

Zacks Rank #2 The Walt Disney reported third-quarter fiscal 2025 adjusted earnings of $1.61 per share, which beat the Zacks Consensus Estimate by 10.3% and increased 15.8% year over year. Revenues rose 2.1% year over year to $23.6 billion but missed the Zacks Consensus Estimate by 0.1%.

As of June 28, 2025, Disney+ had 127.8 million paid subscribers compared with 126 million as of March 29, 2025. Domestic Disney+ average monthly revenue per paid subscriber increased 0.4% sequentially to $8.09 as higher advertising revenues were offset by the impact of subscriber mix shifts.

International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber rose 2% sequentially to $7.67 due to increases in prices and subscriber mix shifts. Hulu SVOD Only average monthly revenue per paid subscriber increased 0.3% sequentially to $12.4, as higher advertising revenues were offset by the impact of subscriber mix shifts.

Strong Guidance 

In the fourth quarter of fiscal 2025, Disney expects total Disney+ and Hulu subscriptions to increase by more than 10 million compared to third-quarter fiscal 2025, with the majority of the rise coming from Hulu as a result of an expanded Charter deal. For Disney+ subscribers specifically, the company anticipates a modest increase compared to third-quarter fiscal 2025 levels.

DIS provided comprehensive guidance for fiscal 2025, projecting adjusted earnings per share of $5.85, representing an 18% increase over fiscal 2024. For the Entertainment segment, the company expects Direct-to-Consumer operating income of $1.3 billion and double-digit percentage segment operating income growth overall. The Sports segment is projected to achieve 18% segment operating income growth, while the Experiences segment is expected to deliver 8% segment operating income growth.

This guidance reflects DIS’ expectations as management continues to execute on its strategic priorities across streaming services, traditional entertainment, sports programming, and theme park experiences, while managing the integration costs and impacts from recent strategic transactions and business expansions.

Impressive Estimate Revisions 

For fiscal 2025 (ending September 2025), the Zacks Consensus Estimate currently shows revenues of $94.91 billion, suggesting an improvement of 3.9% year over year and earnings per share of $5.85, indicating an increase of 17.7% year over year. The Zacks Consensus Estimate for current-year earnings has improved 1.2% over the last 30 days.

For fiscal 2026 (ending September 2026), the Zacks Consensus Estimate currently shows revenues of $101 billion, suggesting an improvement of 6.4% year over year and earnings per share of $6.47, indicating an increase of 10.6% year over year. The Zacks Consensus Estimate for current-year earnings has improved 1.9% over the last 30 days.

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This article originally published on Zacks Investment Research (zacks.com).

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