Disney (NYSE: DIS) has seen better days following a November to forget for the entertainment giant. A third-quarter earnings report that saw the company miss on both revenue and earnings sent its stock price plummeting by over 7% in its worst single-day loss since June 2020.
However, Disney investors will be hopeful that these issues are short-lived. There are certainly plenty of reasons to rally behind the stock as we enter into the new year and beyond (excuse the Buzz Lightyear reference). With that in mind, we thought that with today being Walt Disney Day, there was no better time to examine some of the best reasons to invest in Disney stock right now.
Disney's experiential offerings are having a hard time right now. Theme parks, theatrical releases, and cruises are all suffering at the hands of the pandemic. However, unlike in other industries where people have turned to viable online alternatives, Disney's brand possesses such drawing power that people just aren't going to be able to stay away once they eventually open back up to full capacity.
Such is the magic of Disney. It has created an experience seemingly like none other. Investors will be buoyed by the fact that one of Disney's newest cruise offerings, the Wish cruise ship, is already almost 90% booked ahead of its anticipated launch in June of next year. If customers return to Disney's other experiences in a similar fashion, the company will be poised for a sizeable boost.
Much was made of subscriber growth for Disney's streaming service in its latest earnings call, with growth slowing markedly for the quarter. However, if we take a step back and analyze the broader numbers Disney+ should be seen as a definite success. In only two years the service has gained 118 million subscribers - over half of Netflix's 209 million - despite Netflix having a clear first-mover advantage.
As the company looks set to continue to roll out some of its bigger box-office offerings on the streaming service exclusively, it has the capacity to draw in more subscribers looking for premium content. Disney is continuing to invest heavily in streaming, and the return to normality for the world might not hinder it as much as people think. With more revenue gained from its experiential offerings, Disney will be in an even better position to invest in and develop its content.
The entertainment industry can be boiled down to a simple battle for people's attention. If you can get more eyes on your product for longer than your competitors can, you have a good chance of being successful. This is where Disney's vast back catalog of intellectual property (IP) comes into play.
Disney has built up enormous brand value over the years, and much of this is rooted in its famous characters. From Mickey Mouse to the Avengers, Disney has managed to captivate audiences of all ages for decades.
When it comes to creating meaningful content, it has the ability to draw on so much that has already been successful and spin it in new and innovative ways. While competitors are looking for the next big success story and trying to manufacture lasting characters, Disney already has a massive advantage by owning so much marketable IP. The company can use this to bring in and retain customers for years, much to the joy of any investors.
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