Is Walt Disney Co (DIS) Stock Trading Below Fair Value?

Wednesday, January 19, 2022 02:04 PM | InvestorsObserver Analysts

Mentioned in this article

Walt Disney Co (DIS) receives a strong valuation ranking of 68 from InvestorsObserver data analysis. The proprietary ranking system focuses on the underlying health of a company through analysis of its stock price, earnings, and growth rate. DIS has a better value than 68% of stocks based on these valuation analytics. Investors primarily focused on buy-and-hold strategies will find the valuation ranking relevant to their goals when making investment decisions.

DIS gets a 68 Valuation Rank today. Find out what this means to you and get the rest of the rankings on DIS!
See Full DIS Report

Metrics Analysis

DIS has a trailing twelve month Price to Earnings (PE) ratio of 139.7. The historical average of roughly 15 shows a poor value for DIS stock as investors are paying higher share prices relative to the company's earnings. DIS's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 1.09 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings. DIS's 12-month-forward PE to Growth (PEG) ratio of 1.59 is considered a poor value as the market is overvaluing DIS in relation to the company's projected earnings growth due. DIS's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.

Summary

All together these valuation metrics paint a pretty poor picture for DIS at its current price due to a overvalued PEG ratio despite strong growth. The PE and PEG for DIS are worse than the average of the market resulting in a valuation score of 68. Click Here to get the full Report on Walt Disney Co (DIS) stock.

Share this article:

Related Articles