If You Missed Out on Netflix Stock, Check Out Walt Disney Co

Will This Send Disney Stock Soaring in 2021?

I’ve been pounding the table on Netflix Inc (NASDAQ:NFLX) stock since 2015.

And due to the stock’s sheer upward momentum, even investors who didn’t get on board with Netflix stock until January 2019 are now laughing all the way to the bank.

With NFLX stock surging by another 13% after its fourth-quarter earnings report, new investors may have second thoughts about buying a volatile ticker after it has already shot through the roof.

For those who think they’ve missed out on Netflix stock, it’s a good time to check out Walt Disney Co (NYSE:DIS).

Disney has been around for nearly a century. As a media and entertainment giant, DIS stock has always had a large following in the investment community. But the main driver behind a recent surge in investor interest was the company’s  new line of business.

I’m talking about “Disney+.”

Walt Disney Co launched its on-demand video streaming service Disney+ in November 2019. In the first 24 hours after the launch, 10 million customers had signed up for the service. (Source: “Disney+ Surpasses 10 Million Sign-Ups Since Launch,” CNBC, November 13, 2019.)

At an investor event last December, the company revealed that, as of December 2, 2020, the subscriber base of Disney+ had grown to a staggering 86.8 million. (Source: “Investor Day 2020,” Walt Disney Co, December 10, 2020.)

Of course, Netflix is still quite a bit bigger than Disney+ in terms of total subscribers. But Disney is catching up, especially since Disney+ is just one of the company’s streaming services.

Walt Disney Co has more than 137 million subscribers across its direct-to-consumer portfolio, including 86.8 million Disney+ subscribers, 38.8 million “Hulu” subscribers, and 11.5 million “ESPN+” subscribers.

The growth in the company’s on-demand video streaming service should not come as a surprise. Disney owns a vast content library, including the content from Pixar, Marvel, Star Wars, and National Geographic.

Many of Walt Disney Co’s franchises have huge fan bases around the world. With Disney+ costing $6.99 per month or $69.99 per year, signing up for the service has been a pretty easy decision for fans of the company’s franchises.

And the stay-at-home environment caused by the COVID-19 pandemic has made the service even more popular.

Going forward, I expect the growth momentum for Disney+ to continue.

Yes, there will be multiple video streaming service providers sharing the market. But because the services are not expensive—most start at less than $10.00 a month—Walt Disney Co’s giant content library and large following should allow it to continue to gain subscribers.

Other than becoming a prominent player in the on-demand video streaming industry, Disney stock also has the potential of being a pandemic recovery play.

You see, the company’s theme parks and cruise lines have been closed for a substantial period of the last year or so. And because many movie theaters have either been closed or operating at reduced capacity for months, limitations on theatrical releases have meant that Disney’s studio entertainment segment hasn’t been doing well.

But when the pandemic comes to an end, Disney’s parks, cruise lines, and studio entertainment businesses should get a solid boost.

Walt Disney Co (NYSE:DIS) Stock Chart

Chart courtesy of StockCharts.com

Analyst Take

As you can see from the above chart, Disney stock has enjoyed a nice rally since the market sell-off in March 2020. And thanks to Walt Disney Co’s investor day event—during which the company revealed the growth of Disney+ subscribers—DIS stock shot up in December 2020 and is now trading near a new all-time high.

Moving forward, subscriber growth will likely continue to be a catalyst for Disney stock, while the recovery in the company’s other segments is also worth watching.