Warner Bros Discovery Inc (WBD) High Multiple Meets Weak Returns

For 2025 (reported in USD), revenue was about USD 37.3 billion, declining 5.1% versus the prior year, while EBIT came in at USD 738 million and net income at USD 749 million. Profitability looked very different depending on the line item: a 44.27% gross margin sat alongside a 9.88% operating margin and a 1.95% net profit margin.

Cash and capital intensity were prominent features of the year’s profile. Depreciation and amortization was about USD 11.9 billion, and the company’s cash flow proxy was roughly USD 12.4 billion, with cash of USD 4.6 billion and total debt of USD 139 million at period end. Returns stayed modest on the equity base, with ROE over the last twelve months at 2.05%.

At USD 27.42 per share, the stock price sits below the DCF-derived fair value range from a weaker scenario to a stronger outcome. The headline multiples alongside that setup include a 93.82 trailing P/E and about 10.41x EV/EBITDA, which frames the current pricing as relatively demanding on earnings even while the DCF points the other way.