WBD - Warner Bros. Discovery: Turnaround Still In Progress

2024-05-10 18:26:02 ET

Summary

• Despite a tough Q1, Warner Bros. Discovery stock reacted positively, indicating the market is warming up to the turnaround story.
• The company is having a strong year of movie releases, the advertising market is improving, and partnerships are planned to widen Max viewership.
• WBD is still cheap compared to its low growth peers who face similar challenges.

Mr. Market Is Now Looking Past A Tough Q1

Warner Bros. Discovery ( WBD ) had another tough quarter in Q1 2024 . Looking at the headline numbers, the company had a revenue decline of 7% compared to Q1 2023, similar to the year-on-year decline they reported last quarter. Adjusted EBITDA posted a bigger decline, down 19% to $2.1 billion. Free cash flow continues to be a bright spot, however. I noted last quarter that FCF should have a headwind as spending on production resumed after the writers and actors strikes, but FCF came in at a positive $390 million in Q1, compared to a big cash outflow a year ago....

For further details see: