Market Health

How Disney Stays One Step Ahead of Its Competitors

A year ago, I penned a piece about The Walt Disney Company (NYSE: DIS).

The pandemic had destroyed its quarterly earnings. Five of its six parks were shuttered. And the company had reported a massive $1 billion loss in revenue.

But I told readers “hakuna matata”… Don’t worry…

Today, let’s see how that prediction played out. And let’s take a look in Ursula’s crystal ball to see what’s in store.

You Ain’t Never Had a Friend Like Me

On May 14, 2020, I wrote

Plenty of companies out there don’t have the resources to survive this pandemic. They didn’t adapt to the digital world fast enough… or their models have been deemed obsolete by the changing tides of the pandemic.

But Disney is not one of them…

This giant isn’t going anywhere.

That’s why I’m confident Disney is still a “Buy.” And I believe it will recover from the 2020 slump that the global economy is suffering through.

And, in true Maui fashion, all I can say is…

You're Welcome

Since then, Disney’s share price has soared 80% to around $185. It’s also more than 30% above its previous all-time high.

When You Wish Upon a Stock

In the past year, Disney not only survived… but thrived.

Go the Distance to 100 Million

Its Disney+ streaming service was the most valuable player of the pandemic. And the message Mickey Mouse sent to his rival Netflix (Nasdaq: NFLX) was “I wanna be like you… but better.”

Back in 2019, the company said it planned to hit 60 million to 90 million global users by 2024. But by the end of the first quarter, it already had 26.5 million users.

Then it hit 100 million subscribers in just 16 months…

So this was a five-year milestone goal that Disney steamrolled right past. Its new expectation is for between 230 million and 260 million subscribers by 2024.

The company achieved this massive growth by prioritizing long-term value over quick profits.

The launch price for Disney+ was a mere $6.99 a month – less than half the cost of monthly dues just around the riverbend at Netflix. And viewers still got access to all the blockbuster titles under Disney, Marvel, Pixar, Lucasfilm and National Geographic.

Not to mention, a Disney+ subscription included benefits such as 4K resolution and simultaneous streaming on multiple devices. Those are premium perks valued at a Scrooge McDuck-worthy price of $18 at Netflix.

So it was a bargain. And by the time Disney raised the price to (gasp!) $7.99, the world was already hooked on “Baby Yoda.”

Everything’s Better in Summer

Though Disney+ surely saved the day for the greater House of Mouse company, it was only part of the stock’s success story from the past year.

Last month, the company announced expansion plans for its park in Anaheim, California, dubbing the new and improved park “DisneylandForward.”

This is a strong sign of confidence that, for the first time in forever, the worst days of the pandemic are behind us. And all the travel and leisure industry needs is a little bit of pixie dust to start flying again.

The past year also had an unexpected bright side for parkgoers…

Visitor capacity limits actually meant shorter lines and smaller crowds. CEO Bob Chapek told Bloomberg that park “guests are even more satisfied than they were prior to the pandemic.”

Plus, Disney locations did a little bibbidi-bobbidi-boo with their technology to put safety front and center. Guests have been using a mobile app to order food in the parks, open resort room doors, pay for merchandise and more.

The past year has shown that nothing can defeat this media giant. Not Maleficent, Cruella, Gaston or COVID-19.

Disney continually delivers way beyond the bare necessities.

I won’t say I’m in love… but the behemoth is certainly one jump ahead of its competitors. And it will likely remain so for years to come.

Good investing,


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