The Walt Disney Company (DIS): investment thesis checklist
What a value investor writing down why they own The Walt Disney Company would be relying on, read from its filings: the figures that have carried the business, the lines a reader might set on them, and the published tests it meets today. A list to write against, not a view on the company.
1. The figures the case would rest on
- Return on invested capital: 8.3% in FY2024; between 5.9% and 21.3% over 7 filed years, median 8.3%. Does the thesis need it to stay inside that range?
- Return on equity: 11.3% in FY2025; between -3.4% and 25.8% over 10 filed years, median 8.1%. Does the thesis need it to stay inside that range?
- Free cash flow yield: 4.9% in FY2025; between 0.5% and 5.6% over 10 filed years, median 4.1%. Does the thesis need it to stay inside that range?
- EV to EBIT: 13.97x in FY2025; between 11.68x and 46.88x over 9 filed years, median 14.06x. Does the thesis need it to stay inside that range?
- Price to earnings: 16.56x in FY2025; between 13.99x and 161.48x over 9 filed years, median 19.57x. Does the thesis need it to stay inside that range?
- Operating margin: 18.6% in FY2025; between 11.5% and 26.8% over 10 filed years, median 17.8%. Does the thesis need it to stay inside that range?
- Net debt to EBITDA: 1.74x in FY2025; between 0.88x and 3.29x over 9 filed years, median 2.00x. Does the thesis need it to stay inside that range?
- Revenue growth, 5-year CAGR: 7.6% in FY2025; between 3.9% and 8.4% over 10 filed years, median 6.0%. Does the thesis need it to stay inside that range?
- Share count change: -1.1% in FY2025; between -4.5% and 10.6% over 10 filed years, median 0.0%. Does the thesis need it to stay inside that range?
2. What must stay true: guardrails a reader might set
Each line is drafted from The Walt Disney Company's own current figure, never from a level we think a business should clear, and replayed over its filed years. They are a reader's to keep, edit or drop.
Debt to Equity stays at or below 0.51x
Today 0.41x. Replayed over 7 filed years, it would have broken in 3; most recently FY2022, at 0.55x (10-K, filed 2022-11-29).
Revenue Growth 1Y stays at or above 0%
Today 3.35%. Replayed over 8 filed years, it would have broken in 1; most recently FY2020, at -6.06% (10-K, filed 2020-11-25).
Current Ratio stays at or above 0.57x
Today 0.71x. Replayed over 8 filed years, it held in every one.
3. What would break it
- A filed year in which debt to equity rose above 0.51x.
- A filed year in which revenue growth 1y fell below 0%.
- A filed year in which current ratio fell below 0.57x.
4. The published tests it meets today
Of 30 tests value investors published: 1 met, 26 not met, 3 we could not complete. Counts, never a score.
Meets: Cash-covered dividend.
What this cannot tell you
What the numbers say today, not the day one stops being true. The reasons are not written down.
An account adds
One email the night a number you wrote down breaks. Silence otherwise.
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How this is computedA computation on accounts filed with the SEC, not a recommendation and not advice. Past filings do not indicate future results. Risk disclaimer.