Disney's Streaming Base Expands: Can Subscriber Growth Drive Gains?

Disney’s DIS streaming base is growing rapidly, underscoring its growing role in driving the company’s Entertainment strategy. In the third quarter of fiscal 2025, combined Disney+ and Hulu subscriptions climbed to 183 million, up 2.6 million sequentially. This momentum broadens the company’s advertising reach, strengthens bundling opportunities and enhances its ability to monetize subscribers through a sharper focus on Average Monthly Revenue Per Paid Subscriber (ARPU).

Content is powering Disney’s streaming push, with profits funding a strong 2025 slate — Marvel Zombies (Sept. 24, 2025), Tron: Ares (Oct. 10, 2025), Predator: Badlands (Nov. 7, 2025), Zootopia 2 (Nov. 26, 2025) and Avatar: Fire and Ash (Dec. 19, 2025). These releases are expected to drive strong viewership, attract new subscribers and reinforce Disney’s competitive edge in the streaming market. Combined with personalization, pricing strategies and ESPN’s sports content, Disney is building a more balanced and resilient streaming portfolio for sustained growth.

Disney is shifting from chasing subscriber counts to boosting ARPU and profitability. Recent price increases, ad-supported tiers and Hulu’s integration into Disney+ are central to that strategy, allowing the company to extract more value from its existing subscriber base.

Looking ahead, management expects over 10 million net new subscriptions in the fourth quarter of fiscal 2025, largely via Hulu’s expanded Charter deal. The Zacks model forecasts the combined streaming base will rise to 185.4 million, further supporting optimism. Improving ARPU, supported by pricing, advertising and cross-platform synergies, positions Disney’s subscriber growth as a sustainable driver of both long-term gains and margin expansion.

Disney & Rivals Face Off in Streaming Subscriber Race

Warner Bros. Discovery WBD is emerging as a key contender in streaming, emphasizing profitability and premium content. In the second quarter of 2025, WBD’s subscriber growth hit 125.7 million, boosting streaming revenues 9% year over year to $2.8 billion. With its strong HBO-driven library and expanding global reach, WBD aims for 150 million streaming subscribers by 2026 and $1.3 billion in profit in 2025, strengthening its position against Disney in the streaming subscription race.

Netflix Inc. NFLX is considered Disney's strongest streaming rival, boasting over 300 million subscribers worldwide. Fueled by strong originals, international expansion, and disciplined content investment, the company continues to outpace competitors. Netflix's proprietary ad-tech platform adds high-margin revenues, enhancing monetization while keeping subscriptions attractive. With subscriber growth accelerating and profitability rising, Netflix is reinforcing its dominance in streaming and maintaining a competitive edge over Disney in the global subscription market.

DIS’ Share Price Performance, Valuation & Estimates

Disney shares have gained 3.5% in the year-to-date period, underperforming both the Zacks Consumer Discretionary sector’s rise of 10.7% and the Zacks Media Conglomerates industry’s growth of 11.2%.

DIS’s YTD Price Performance

From a valuation standpoint, DIS stock is currently trading at a forward 12-month price/earnings ratio of 17.88X compared with the industry’s 20.47X. DIS has a Value Score of B.

DIS’s Valuation

The Zacks Consensus Estimate for Disney’s fiscal 2025 and 2026 earnings is pegged at $5.86 and $6.49 per share, respectively, reflecting upward revisions over the past 30 and 60 days. These figures suggest year-over-year growth of 17.91% in fiscal 2025 and 10.69% in fiscal 2026.

DIS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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