Disney's Rush Hour Streaming Gains Clash With Parks Recovery

Streaming Profitability Hits Escape Velocity

Disney’s direct-to-consumer business has undergone a seismic transformation. The company’s fiscal 2025 results show streaming operating income climbing to $1.3 billion for the full year—a stunning reversal from the $4 billion loss just three years prior. Fourth-quarter momentum accelerated even further, with streaming generating $352 million in operating profit, representing 39% year-over-year growth.

The combined subscriber base for Disney+ and Hulu expanded to 196 million by quarter-end, with 12.4 million net additions during the final three months alone. Disney+ Core independently attracted 132 million users. Management’s December 2025 announcement to fully consolidate Hulu into Disney+ by 2026 signals confidence in this rush hour streaming phase—the company projects 10% operating margins for the integrated platform in fiscal 2026, a milestone that validates the direct-to-consumer pivot.

Parks Defy Attendance Headwinds With Revenue Gains

While streaming grabbed headlines, the Experiences segment quietly delivered record results. Full-year operating income reached $10 billion, up 8%, with the fourth quarter alone generating $1.9 billion, a 13% increase. The geographic split reveals divergent momentum: domestic parks operating income grew 9% to $920 million, while international parks surged 25% to $375 million, driven by Disneyland Paris outperformance.

Perhaps most intriguingly, despite a 1% domestic attendance decline in the first quarter of fiscal 2026, guest spending per capita jumped 5%. This dynamic suggests premium positioning remains intact even as visitor traffic normalizes post-pandemic. Management forecasts high single-digit percentage growth for Experiences operating income in fiscal 2026, with momentum weighted toward the second half.

Competitors Face Fragmented Recovery Paths

The entertainment sector’s theme park recovery reveals stark contrasts. Comcast’s Universal division demonstrates how transformative capital investments can shift momentum—Epic Universe’s May 2025 debut powered a 19% revenue surge to $2.72 billion in Q3. However, Comcast’s Peacock streaming platform stalled at 41 million subscribers through September 2025, cutting losses to $217 million but showing zero growth.

Six Flags Entertainment painted a bleaker picture: third-quarter 2025 attendance ticked up just 1% to 21.1 million guests, yet revenues fell 2% to $1.32 billion. The merged Six Flags-Cedar Fair entity attributes weakness to promotional pressure and a shifting attendance mix skewed toward lower-spending season pass holders. The combined company targets $1.08 billion to $1.12 billion adjusted EBITDA for 2025 while pursuing $70 million in remaining cost synergies.

Valuation and Outlook

DIS trades at 16.81X forward 12-month P/E, below the Media Conglomerates industry average of 18.74X. Zacks consensus estimates project $6.60 earnings per share for fiscal 2026, implying 11.3% year-over-year growth. Over the past three months, Disney shares returned 1.1%, outperforming the Consumer Discretionary sector’s 4.8% decline.

The convergence of accelerating streaming profitability and sustained parks pricing power positions Disney differently than regional operators struggling with consumer sensitivity. Management’s forecast for double-digit adjusted earnings growth through fiscal 2027 rests on this twin-engine model—streaming margins expanding toward double digits while premium experiences maintain their revenue premium despite normalized attendance levels.