I hope you are right. They certainly have a lot of content. I know Longleaf was very bullish at one time, but I think they have tempered their enthusiasm. You may want to go a see what they have written. They also did a podcast with the CEO, but that’s probably aged by now, but maybe still worth a listen. Personally, I don’t watch much on Max. But the Harry Potter and DC comic properties may interest someone. Discovery was always known for their low cost budget documentaries and can’t recall if they maintained some of the European sports channels they acquired back in the day. Nice write-up.
Nice write up! I too have been trying to value WBD. You did a great job explaining the future depreciation part. Just curious why you think revenue will be up +4% YoY for the next few years. For 2024, sales will probably be down YoY. Is the company planning/doing anything that makes you think sales will inflect higher this year?
Glad you enjoyed it. There's a lot in the pipeline (both movies & gaming), but the reality is that the success is uncertain. Some of it will likely do well and some of it will be terrible.
I use the 4% as an estimate, based on the historical data.
you dont take interest expense out of FCF? think a big issue is revenue growth is tied to ever more content spend which is hit or miss, its honestly a bad business now.. losing the free money from the bundle has crippled media. stock is dead money until we know if they are gonna do a deal with CMCSA cable net spinco.
You could be right. The range of outcomes is fairly wide and dependent on many factors.
As for the interest expense, no. It is not taken out of FCF. The FCF is calculated as cash from operations - capex. The goal is to understand the cash generation of the underlying business. In the DCF model, the entire debt is subtracted to get to the value od the company.
I hope you are right. They certainly have a lot of content. I know Longleaf was very bullish at one time, but I think they have tempered their enthusiasm. You may want to go a see what they have written. They also did a podcast with the CEO, but that’s probably aged by now, but maybe still worth a listen. Personally, I don’t watch much on Max. But the Harry Potter and DC comic properties may interest someone. Discovery was always known for their low cost budget documentaries and can’t recall if they maintained some of the European sports channels they acquired back in the day. Nice write-up.
Nice write up! I too have been trying to value WBD. You did a great job explaining the future depreciation part. Just curious why you think revenue will be up +4% YoY for the next few years. For 2024, sales will probably be down YoY. Is the company planning/doing anything that makes you think sales will inflect higher this year?
Glad you enjoyed it. There's a lot in the pipeline (both movies & gaming), but the reality is that the success is uncertain. Some of it will likely do well and some of it will be terrible.
I use the 4% as an estimate, based on the historical data.
you dont take interest expense out of FCF? think a big issue is revenue growth is tied to ever more content spend which is hit or miss, its honestly a bad business now.. losing the free money from the bundle has crippled media. stock is dead money until we know if they are gonna do a deal with CMCSA cable net spinco.
You could be right. The range of outcomes is fairly wide and dependent on many factors.
As for the interest expense, no. It is not taken out of FCF. The FCF is calculated as cash from operations - capex. The goal is to understand the cash generation of the underlying business. In the DCF model, the entire debt is subtracted to get to the value od the company.