Warner Bros. Discovery Inc. (WBD) Shares: Are They Risky Or Cheap?

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Warner Bros. Discovery Inc. (NASDAQ:WBD) finished Thursday with a subtraction of -$0.21 to close at $12.01, a downside of -1.72 percent. An average of 27,629,041 shares of common stock have been traded in the last five days. There was a fall of -$1.16 in the past week. The last 20 days have seen an average of 23,505,391 shares traded, while the 50-day average volume stands at 25,063,412.

WBD stock has decreased by -6.10% in the last month. The company shares reached their 1-month lowest point of $11.88 on 09/22/22. Shares of the company touched a low of $12.22 and a high of $31.55 in 52 weeks. In spite of this, the price is down -61.93% from the 52-week high.


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Valuation Metrics

Warner Bros. Discovery Inc. (WBD) stock’s beta is 1.37. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.56, the price-to-book (PB) ratio at 0.53, and the price-to-cash flow ratio at 11.98.

Financial Health

The quick ratio of Warner Bros. Discovery Inc. for the three months ended June 29 was 1.10, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 1.00 and a total debt to equity ratio of 1.02 for the quarter ending June 29. Its gross profit as reported stood at $7.57 billion compared to revenue of $12.19 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Warner Bros. Discovery Inc.’s return on assets was -4.60%.

Earnings Surprise

For the three-month period that ended June 29, Warner Bros. Discovery Inc. had $51.39 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of -$3.42 billion in the quarter, while revenues were grew 100.0%. The analyst consensus anticipated Warner Bros. Discovery Inc.’s latest quarter earnings to come in at $0.02 per share, but it turned out to be -$0.94, a -4,800.00% surprise. For the quarter, EBITDA amounted to $4.25 billion. Shareholders own equity worth $2.43 billion.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Warner Bros. Discovery Inc. (WBD) price momentum. RSI 9-day as of the close on 22 September was 34.68%, suggesting the stock is Neutral, with historical volatility in this time frame at 54.02%.

As of today, WBD’s price is $12.67 -8.81% or -$1.16 from its 5-day moving average. WBD is currently trading -11.17% lower than its 20-day SMA and -33.83% lower than its 100-day SMA. However, the stock’s current price level is -15.30% below the SMA50.

The stochastic %K and %D were 50.60% and 57.31%, respectively, and the average true range (ATR) was 0.63. With the 14-day stochastic at 7.88% and the average true range at 0.65, the RSI (14) stands at 38.27%. The stock has reached -0.35 on the 9-day MACD Oscillator while the 14-day reading was at -0.34.

Analyst Ratings

Barrington Research downgraded Warner Bros. Discovery Inc. (NASDAQ: WBD) to a a Mkt perform rating in its most recent analyst report. Previously, the stock was rated as an Outperform.

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