Is Disney Stock a Buy After Record Box Office Weekend? Jim Cramer Thinks So.
Jim Cramer, famed television personality and host of the popular CNBC show 'Mad Money,' has come out in favor of Disney (DIS). Cramer believes the entertainment giant, after a rough patch, is poised for a rebound thanks to the unexpected success of Lilo & Stitch, the live-action remake of the beloved 2002 animated classic.
The movie made a spectacular Memorial Day weekend with a $183 million domestic box-office haul, and Disney reported on May 27 that it had earned $361.3 million worldwide to date, leading to Disney becoming the first studio to crossed $2 billion in collections at the global box office in 2025.
However, amid all the excitement, DIS stock is still flat on a YTD basis, with a market cap of $200.5 billion. So, is Cramer's optimism around the 'House of the Mouse' justified or should investors make a beeline for the stock? Let's find out.
Disney Posts Solid Q2 Results
Since CEO Bob Iger's return to the helm, Disney's operations have stabilized, with revenue and earnings experiencing compound annual growth rates (CAGRs) of 7.1% and 43.8%, respectively.
The strong showing continued in the most recent quarter as well with Disney reporting a beat on both revenue and earnings. Revenue grew by 6.8% from the previous year to $23.6 billion, and the company moved into profitability in Q2 2025 with EPS of $1.81 compared to a loss of $0.01 per share in the year-ago period.
All the key revenue segments of the company clocked growth, with the Entertainment, Sports, and Experiences segments growing by 9%, 5% and 6% on a year-over-year basis to $10.7 billion, $4.5 billion and $8.9 billion, respectively. Moreover, Disney+ saw its total paid subscribers rise to 126 million from 124.6 million in the prior year with an improvement in monthly revenue per paid subscriber to $7.77 from $7.55 in the same period.
Disney's cash flow from operations for the quarter stood at $9.9 billion (vs $5.8 billion in Q2 2024), with free cash flow rising to $5.6 billion from $3.3 billion in the prior year.
Analysts project forward revenue and earnings growth rates of 3.99% and 61.75% for Disney, which are ahead of the sector medians of 3.18% and 11.13%, respectively.
Core Drivers
The primary reason Disney has become a focus of investor enthusiasm is its ambitious blueprint to expand across physical entertainment destinations and interactive digital experiences. A major component of this strategy is the company's decision to establish its next flagship theme park on Yas Island in Abu Dhabi. This forthcoming resort will become Disney's seventh such complex and, according to Josh D'Amaro, who leads Disney Experiences, it is poised to be the most advanced and interactive project the company has ever developed. While no opening date has been disclosed, the announcement alone marks a significant step in Disney's global growth efforts.
Alongside international expansion, substantial updates are also planned for Disney's domestic parks. In Anaheim, the Avengers-themed zone will see considerable growth, while a new Avatar-based experience is set to be introduced at California Adventure. In Florida, Magic Kingdom will unveil an entire area focused on classic Disney villains, and Animal Kingdom will debut a new Indiana Jones narrative. Additions are also coming to other corners of the Walt Disney World Resort, including a Monsters, Inc.-inspired space at Hollywood Studios and a new extension in Frontierland featuring characters and themes from the Cars franchise.
Simultaneously, Disney is investing heavily in gaming and digital realms. Through a $1.5 billion equity stake in Epic Games, the company has laid the groundwork for an entirely new entertainment universe inspired by Fortnite. This initiative will incorporate beloved Disney franchises such as Star Wars and Marvel, with Epic's Unreal Engine serving as the backbone for game development and immersive storytelling.
Beyond content creation, the company is actively restructuring its streaming and media business to drive efficiency and monetization. One major move involves integrating its three streaming services — Disney+, Hulu, and ESPN+ — into a singular platform that emphasizes user customization and value-oriented bundling. Disney also intends to bring ESPN directly to consumers via a new standalone product in the coming months. In parallel, the company is finalizing a transaction that will see Hulu + Live TV combine with fuboTV in a multibillion-dollar deal, resulting in Disney holding a 70% stake in the newly merged streaming service.
Taken together, these moves reflect a broader strategic vision — one that merges Disney's strengths in storytelling, technology, and global brand loyalty. With physical expansion complementing innovation in digital engagement and content distribution, Disney is setting the stage not only for continued financial growth but for deeper consumer interaction with its franchises. For shareholders, the convergence of theme park development, gaming ventures, and streaming integration paints a compelling picture of a company aligning its core assets to meet evolving consumer demands and unlock long-term value.
Analyst Opinions on DIS Stock
Overall, analysts have attributed a rating of 'Strong Buy' for Disney stock with a mean target price of $125.73, which denotes an upside potential of about 12% from current levels. Out of 29 analysts covering the stock, 21 have a 'Strong Buy' rating, two have a 'Moderate Buy' rating, and six have a 'Hold' rating.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
an hour ago
- Globe and Mail
3 Things to Know About Amazon Stock Before You Buy
Everyone knows about Amazon (NASDAQ: AMZN). It's one of the most dominant, innovative, and disruptive enterprises that the world has ever seen. Today, it sports a monster market cap of $2.2 trillion, making it one of the most valuable companies out there. Amazon has done a fantastic job of rewarding its perennial investors. Shares are up 853% in the past decade and 11,290% in the past 20 years (as of May 28). Even after such an incredible performance, the " Magnificent Seven" stock might still be a worthy portfolio addition today, especially since it trades 15% off its peak. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Here are three things that investors need to know about Amazon before they buy. 1. The growth isn't over Between 2021 and 2024, Amazon's revenue increased by 36%. And according to Wall Street consensus analyst estimates, the top line will grow by 31% between 2024 and 2027. This is despite the business collecting a whopping $638 billion in sales last year. There is still meaningful growth potential. Amazon is well positioned to ride the wave of four potent secular trends. Of course, there's online shopping and the ongoing rise of e-commerce. But the company should also be able to continue leveraging its strong competitive positions in cloud computing with Amazon Web Services (AWS), digital advertising, and artificial intelligence (AI). Because Amazon's performance will be influenced by these tailwinds, I wouldn't be surprised if Wall Street's revenue forecast over the next three years proves conservative. 2. Multiple competitive advantages Warren Buffett is an investing legend who loves to own businesses that have an economic moat. This just means that a company possesses durable competitive advantages that make it difficult for rivals to effectively compete in an industry. Amazon stands out because it has multiple factors working to its benefit. For starters, the business has a powerful network effect, specifically with its marketplace. As more buyers go to the site to shop, sellers find the platform more valuable. In turn, this attracts more buyers because the product selection keeps expanding. Plus, the Prime membership option perpetuates this positive feedback loop, as Prime customers are sticky and might spend more. There's also a cost advantage that stems partly from Amazon's sprawling logistics footprint. Dense delivery routes keep shipping expenses low. And with its scale and sales base, the business also has buying power over suppliers. Switching cost is another important competitive advantage, this one for AWS. Enterprise customers depend on Amazon as an IT partner, which will become truer as adoption of AI tools grows. These customers won't want the hassle of changing providers. Investors can point to Amazon's wide economic moat as proof that this is an extremely high-quality company. There is minimal threat of disruption, which reduces risk. 3. Untapped earnings power Amazon has historically focused on growing the top line at a brisk pace. Shareholders bought into management's strategy because they knew the business was investing aggressively in new growth vectors. This has worked, as demonstrated by the company's huge scale. However, CEO Andy Jassy is figuring out ways to boost profitability, which is encouraging for investors. He wants to boost operational efficiencies and expense controls. As a result, operating income went from $24.9 billion in 2021 to $68.6 billion in 2024. While investors probably appreciate seeing profitability continue to improve, the best course of action for Amazon's long-term success is for the leadership team to properly invest in opportunities to grow the intrinsic value of the business over time. In other words, Amazon's true earnings power is still untapped. Should you invest $1,000 in Amazon right now? Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Globe and Mail
an hour ago
- Globe and Mail
Down 16%, Should You Buy the Dip on Alphabet?
By zooming out, it becomes obvious that Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) has been a huge winner for investors. Shares have surged 144% in the past five years, and they're up an impressive 525% just in the last decade. Becoming a dominant internet enterprise has resulted in some very happy shareholders. But as of this writing on May 28, this top technology stock trades 16% below its high, which was reached on Feb. 4. Should you take advantage of the market's pessimism and buy the dip on Alphabet right now? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Is AI a risk or an opportunity? With the proliferation of generative artificial intelligence (AI) tools in recent years, investors have rightfully been concerned that Alphabet's crown jewel, Google Search, that represented 56% of sales in the first quarter, would be disrupted. That's because it's believed that users would turn more to AI when seeking out information on a variety of topics, pulling traffic away from Google Search. In turn, this could negatively impact advertising revenue. So far, it appears these fears are overblown. First off, Google Search still commands a whopping 90% of global market share when it comes to search engines. Additionally, Google Search saw revenue increase 10% year over year in Q1. And that $50.7 billion sales figure is up 28% from the same period three years ago. Lastly, it's worth pointing out that Alphabet isn't resting on its laurels. The company has clearly made AI a top priority. At its annual Google I/O developer conference in May, Alphabet did not disappoint. A notable 100 updates were announced, with new AI features coming across the board. Alphabet is already finding ways to make money from AI. "For AI Overviews, overall, we continue to see monetization at approximately the same rate," Chief Business Officer Philipp Schindler said on the Q1 2025 earnings call when comparing Overviews to traditional search. And when it comes to advertising customers, AI is helping them create more effective marketing campaigns that can increase return on spend and enhance targeting capabilities. In Q1, Alphabet generated $34.5 billion in net income. This puts it in an enviable position to keep plowing sizable financial resources into AI initiatives to bolster its competitive standing. Alphabet's economic moat Alphabet's wide economic moat is a key factor that highlights just how outstanding of a business this really is. The company benefits from powerful network effects within Search and YouTube. There are invaluable, intangible assets at play, like the Alphabet and Google brands, unrivaled technological know-how, and the ability to collect unbelievable amounts of data that can directly impact strategic decisions. There is also a cost advantage, particularly with Google Cloud. The platform requires huge fixed costs to build out the infrastructure. This explains why the segment was unprofitable for a long time. However, now that revenue has scaled up to $49 billion on an annualized run-rate in Q1, Google Cloud is boosting the bottom line. Operating income totaled $2.2 billion in the first three months of 2025. Google Cloud's customers also deal with high switching costs. Once they onboard and start to depend on Alphabet as its mission-critical IT partner, it makes sense why they would be inclined to stay put unless they want to cause potential operational disruptions. Trading at a discount to the market Investors will notice that Alphabet's valuation is too hard to ignore. Shares trade at a price-to-earnings (P/E) ratio of 19.2. This is a discount to the S&P 500 Index, which just doesn't seem warranted given the quality of this business. And of all the " Magnificent Seven" stocks, Alphabet is the cheapest. Finding such a great deal in the stock market can make investors think that they're overlooking something. However, it's best not to overanalyze the situation. Alphabet is a smart buy while on the dip. Should you invest $1,000 in Alphabet right now? Before you buy stock in Alphabet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alphabet wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
CTV News
an hour ago
- CTV News
Pride Toronto faces another setback as Google, Home Depot pull sponsorship
Two more major corporate sponsors have pulled their funding for Pride Toronto. (THE CANADIAN PRESS/Andrew Lahodynskyj) Pride Toronto has faced another setback, losing two more major corporate sponsors — Google and Home Depot — just before Pride Month begins, Pride Toronto executive director Kojo Modeste told CP24 Saturday afternoon. This latest setback follows several other sponsorship losses Pride Toronto experienced in recent months. Modeste spoke to CTV News about those earlier losses in February. The non-profit in charge of the 2SLGBTQ+ festival is facing a loss of around $700,000 in corporate sponsorships as a result of all the withdrawals, he said. Modeste and the Pride Toronto team first heard about Google's withdrawal on May 1, while Home Depot's decision was disclosed on Wednesday. However, no reasons were provided for the termination of sponsorships by either company, he said. 'They both agreed that they were going to be part of the festival this year. They gave us a verbal commitment. In one case, they gave us a written commitment,' Modeste said. 'It was not a signed contract. So, it was very unfortunate to lose both these sponsors.' Pride Toronto has numerous contracts with artists and vendors from across Canada, so there won't be any major changes in the planning of the 2025 festival. However, Modeste stated that things could look very different by next year if this trend continues. 'We do hope that we're going to be able to recover from the loss that we currently have,' he said. Modeste attributes these changes to the influence of the political climate in the U.S. and the direction taken by U.S. President Donald Trump's administration. 'Pride Toronto has been in other hard positions in the past, and they recover,' he said. 'And I can assure you, I want folks to know that they're coming and should expect nothing but the best from Pride Toronto.' Google and Home Depot have not responded to CTV News' request for comment. Pride Toronto will host festive activities beginning June 1, when Pride Month begins. The Pride Parade will take place on June 29.
