NEW YORK, July 18, 2026, 14:10 EDT
- U.S. markets were shut on Saturday. Disney ended the week at $97.67, up 2.1%.
- Both companies most recently posted revenue growth of approximately 13%. However, their operating margins were significantly different.
- Comcast NASDAQ:CMCSA is set to report on July 23, providing an updated look at parks and streaming.
Disney rose 2.1% despite the market decline. Netflix dropped 6.0%, and the S&P 500 slipped 1.6%.
The division was not due to recent increases in top-line growth. Disney’s SVOD revenue and overall company revenue at Netflix both increased roughly 13%.
The difference was margins. Netflix’s overall operating margin was three times higher than Disney’s streaming business. Disney, meanwhile, was valued at about a third lower based on forward earnings.
| Measure | Disney NYSE:DIS | Netflix NASDAQ:NFLX | S&P 500 |
|---|---|---|---|
| Friday change | -2.1% | -7.3% | -1.0% |
| Weekly through July 17 | +2.1% | -6.0% | -1.6% |
| Most recent revenue growth | +13.0% SVOD | +13.4% overall | — |
| Most recent operating margin | 10.6% SVOD, non-GAAP | 33.4% overall, GAAP | — |
| Forward price/earnings | 13.5 times | Nearly 20 times | — |
Weekly changes are based on closing prices from July 10 and July 17. Disney’s financials reflect Entertainment SVOD results for the quarter ended March 28. Netflix’s data represents its entire second quarter, making the margins not directly comparable.
The comparison remains important, highlighting the main challenge for investors: converting streaming sales into profit.
Disney reported SVOD revenue of $5.49 billion, an increase of 13%. Operating income climbed 88% to $582 million. The non-GAAP margin was 10.6%.
Disney described this as the unit’s inaugural double-digit margin. The company maintains its goal of reaching at least 10% in fiscal 2026.
Netflix posted quarterly revenue of $12.56 billion, an increase of 13.4%. The company’s GAAP operating margin reached 33.4%. Management expects third-quarter revenue to grow by 11.7%.
Netflix will shift to releasing its view-hours report annually starting in 2027. The update accompanied a more modest growth outlook.
Ben Barringer of Quilter Cheviot did not mince words. “Whenever you take away a data point from investors when results aren’t as good as they have been you will get punished by the market.” Reuters
Disney’s smaller multiple seemed to mitigate the decline. Its stock dropped 2.1% on Friday, compared with a 7.3% fall for Netflix.
The protection has its boundaries. Achieving a higher Disney multiple still depends on continued SVOD margin improvements.
Chief Executive Josh D’Amaro and finance chief Hugh Johnston said they anticipate growth will “accelerate in the second half.” The executives forecast third-quarter segment operating income of approximately $5.3 billion. SEC
Analysts expect third-quarter earnings to be $1.86 per share, down one cent from the previous month. The fourth-quarter forecast stands at $1.77, a rise of 6.6% compared to three months earlier.
The revision trend is weighted towards the end of the year, with most anticipated gains now projected for the fourth quarter.
Sports and parks may disrupt that trajectory. Disney anticipates third-quarter Sports operating income will decrease by approximately 14%. Attendance at domestic parks slipped 1%, but per-capita spending increased by 5%.
Comcast is set to report earnings on Thursday, July 23. Investors will watch for updates on Universal parks, Peacock, and advertising, which are expected to offer insight into sector performance.
Disney is set to release earnings on Wednesday, August 5, ahead of the market open. Investors will watch streaming margins, sports expenses, and domestic attendance as main indicators.
Risks persist. Increased rights expenses may counter streaming growth. Weaker global tourism could impact parks. Additional spending on content and technology may limit margin growth.
This week’s price move gained Disney time. To justify a higher multiple, the company must show that 13% streaming growth can lead to sustained profit.
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