Netflix vs. Disney Stock: Which Is The Better Investment?
Netflix (NFLX) and Walt Disney (DIS) have both experienced significant fluctuations in their stock prices over the last few years. This turbulence is largely due to high
inflation
rates and the challenges of a maturing streaming industry.
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However, both companies have made notable changes recently, making them potential smart investments. Before you decide where to invest, it’s a good idea to delve into which might be the better choice for both your short-term and
long-term financial goals
.
As one of the original names in
the streaming service game
, Netflix has continuously shown impressive growth. It has over 300 million subscribers and is not giving any indication of slowing down.
Many stockbrokers and analysts consider the stock moderately bullish. Moreover, the company has developed durable competitive advantages to establish dominance and operate at a high level over other streamers, which may or may not discourage shareholders from selling for a profit.
Much to the chagrin of loyal Netflix customers, its ad-supported tier is a new growth driver and offers potential for increased profitability. Its proven business model still makes it an industry leader for streaming surfaces.
However, its high valuation and P/E ratio suggest a premium valuation, potentially limiting further upside. Netflix’s heavy investment in content production can impact its profitability if it doesn’t generate sufficient returns, making its content costs outweigh its profitability.
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The current Wall Street consensus has Disney stock (DIS) considered to be a “Moderate Buy.” This is supported by analysts who have a Buy rating for the stock, with a few holding it, and none recommending a sell. This is in large part due to Disney’s diverse business model, which includes theme parks, resorts, movies,
merchandise
and, of course, streaming.
Disney’s valuation metrics suggest it may be undervalued, especially for value investors, as Disney’s forward P/E ratio is more attractive than Netflix’s. Its financial health and growth prospects indicate potential market outperformance thanks to a bundling strategy with Hulu and ESPN as well as owning iconic brands like Marvel, Star Wars and Pixar, to name a few.
Some investors still show concern over streaming losses and profitability but recent quarters have shown improvements. Disney’s traditional television business faces challenges from cable cord-cutting, which is hitting its revenue hard, but pivoting to the Disney+ platform focus could be the best move in the long run.
Overall, Disney appears to be the more stable choice for the long term. The company’s diverse revenue streams, including its profitable parks and merchandise segments, provide a cushion against the volatility of the streaming market.
Disney’s ability to integrate its content across various platforms and experiences further strengthens its position. Netflix, while innovative and growing, is more reliant on its subscriber base for revenue, and new ad-supported streaming options have been a growth driver.
Ultimately, for investors looking for a more balanced and resilient investment, Disney’s diversified business model and extensive portfolio of beloved characters make it a compelling option. Netflix, with its focus on streaming and emerging ventures, may offer growth potential but comes with higher risks and costs.
Editor’s note: Stock information is sourced via MarketWatch and is accurate as of May 28, 2025.
Rebecca Neubauer
contributed to the reporting for this article.
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Netflix vs. Disney Stock: Which Is The Better Investment?
