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Warner Bros. Discovery Stock To $30?

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Warner Bros. Discovery (NASDAQ:WBD) has made a significant recovery in 2025, currently trading around $18 following a series of positive earnings surprises, studio successes, and substantial advancements in streaming profitability. This marks a significant improvement from the single-digit figures at the beginning of the year, benefiting early investors in the company’s resurgence. However, the pressing question is: after doubling in value, can WBD continue to rise — possibly reaching the $25–30 range — or has the potential for growth already been largely realized? But if you’re looking for upside with reduced volatility compared to holding an individual stock, you might want to explore the High Quality Portfolio. It has consistently outperformed its benchmark—a blend of the S&P 500, Russell, and S&P MidCap indices—and has realized returns exceeding 91% since its inception. Additionally, take a look at – Opendoor – OPEN Stock To $3?

Core Thesis: The Path to $25–30

Streaming & Studio Strength vs. Legacy Drag

In Q2 2025, WBD reported $9.81 billion in revenue, slightly surpassing expectations, with the streaming segment turning a profit of $293 million compared to a $107 million loss the previous year. The company also gained 3.4 million new subscribers worldwide, indicating that “Max” is making an impact in international markets. Moreover, blockbusters such as A Minecraft Movie (approaching $1B in global box office) and other successful studio launches have boosted the film sector.

As of now, investors are valuing WBD at approximately 9–10 times its forward earnings, a discount in comparison to Netflix (25–30 times) and Disney (15–20 times). If WBD can grow its streaming base to 150 million subscribers by 2026, while maintaining studio margins and gradually stabilizing cash flow from its linear networks, earnings could approach $2–2.50 per share. Even a conservative 12–15 times multiple on that would justify a stock price in the $25–30 range — representing additional upside of 50–80% from current valuations.

Key Growth Drivers

  • Streaming Subscriber Expansion – The international launch of Max and growth in ad-supported subscribers enhance scale and ARPU.
  • Hit Content Pipeline – Studio triumphs such as Minecraft illustrate WBD’s capacity to generate substantial box office gains.
  • Restructuring Unlock – The division into “Streaming & Studios” and “Global Linear Networks” highlights the growth potential of the business and paves the way for possible spin-offs.
  • Ad-Supported Streaming Tiers – Hybrid models boost monetization while catering to cost-conscious consumers.
  • Debt Reduction – Ongoing debt repayment can reduce interest burdens and enhance free cash flow, increasing equity value.

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Risks to the Thesis

  • Linear TV Decline – Cable networks are losing advertising revenue (with double-digit declines in some quarters), impacting overall results.
  • High Debt Load – High leverage restricts strategic flexibility and amplifies variations in free cash flow.
  • Streaming Competition – Netflix, Disney, Amazon, and Apple remain competitive, making it challenging to sustain profitability.
  • Execution Risk – The international rollout of streaming, careful content expenditure, and cost reductions must align seamlessly.
  • Cyclicality in Box Office – A weak film slate or box office failures could significantly reduce studio earnings.

The Verdict

At $18, WBD has already demonstrated impressive gains in 2025, but the narrative is not over. If management continues to grow streaming profitably, produce major studio blockbusters, and either separate or stabilize the legacy television business, the financials support a valuation closer to $25–30 per share. This would not only signal another rise but also affirm that WBD can succeed in the streaming-driven media environment.

Nonetheless, this represents a turnaround with high execution demands and intense competition. For investors confident in the management’s capacity to navigate content, debt, and profitability, WBD still presents notable upside — although, at $18, the straightforward gains from distressed valuations have already been realized.

Investors should brace themselves for considerable volatility and the possibility of substantial losses should market conditions worsen or if the company does not fulfill its ambitious growth objectives. While the potential for a 2x upside is based on projected revenues, it requires exceptional execution within a swiftly changing and competitive environment. Now, we implement a risk assessment framework while developing the Trefis High Quality (HQ) Portfolio, which, comprising 30 stocks, has a history of successfully outperforming the S&P 500 over the past four years. What is the reason for this? Collectively, HQ Portfolio stocks have yielded better returns with reduced risk compared to the benchmark index; providing a smoother investment experience as demonstrated in HQ Portfolio performance metrics.