Warner Bros. Discovery Stock Is a Buy, but Not for the Reason You Think
Warner Bros. Discovery (NASDAQ: WBD) has made headlines almost weekly after adjusting its video content strategy, and not all of its moves have gone over well with investors. The company's restructuring has involved scrapping multiple European projects, shutting down production on an all-but-completed DC film, and laying off several executives. As a result, Warner Bros. Discovery stock has declined 46% since the company launched in April, as investors have seemingly lost faith in the company.
However, Warner Bros. Discovery's price-to-earnings ratio is nearly at its lowest point ever. In fact, with the metric 46% less than in April, suggesting the company is in better standing than its stock price would have you think. Additionally, while Warner Bros. Discovery isn't often thought of as a video game company, its success and revenue gains in the industry have been significant. With several highly anticipated titles on the way, its gaming segment could further boost revenue as the company waits for the dust to settle on its recent video content changes and it works to gain back investors' trust.
Warner Bros. Games has experienced impressive growth since launching in 2005. Much of its success is due to its growing library of titles based on well-known franchises like Lego and DC Comics. Before the WarnerMedia and Discovery merger that formed Warner Bros. Discovery, the Games division brought in $403 million in the third quarter of 2021, which marks a 5% increase from the $383 million made the year before.
Source Fool.com
