Discovery stock has formed a massive positive divergence between large players volume and price.
Large players volume is blasting off like a rocket. I’m thinking that streaming video providers like Netflix, Comcast, and Disney would love to get their hands on Discovery Communications. Discovery Communications recently acquired Scripps Network Interactive, adding to its production of over 8000 hours per year of original programming. Discover owns and operates various television networks under the Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Velocity, Discovery Family Channel, Destination America, American Heroes Channel, Discovery Life, The Oprah Winfrey Network, Eurosport, Discovery Kids, DMAX, and Discovery Home & Health brands.
I’m wondering if Discovery’s value is rapidly rising because of Disney making an all-stock bid of approximately $52 billion for a significant portion of the assets of 21st Century Fox. Even without this speculative value, Discover has excellent growth and valuation metrics.
Discovery Communications shows strong growth in revenue. Revenue has grown by 15.54% in the last year. Measured over the last 5 years, revenue has been growing by 6.45% yearly.
Discovery announced its earnings on, May 8, 2018. The company reported EPS of $0.53 versus the $0.45 estimate. Revenue also crushed it, coming in at $2.31 billion during the quarter, versus the $2.24 billion estimate. Discovery’s revenue was up 43% year-over-year.
With a P/E ratio of 10.28, the valuation of DISCA can be described as very reasonable. DISCA’s Price/Earning Ratio is a bit cheaper than the industry (Cable and other pay television services) average which is at 15.07. The Forward P/E ratio of 8.31 indicates a rather cheap valuation of DISCA.
I give DISCA stock a buy rating. Most analysts do not agree with my buy rating. Overall there is 1 sell rating, 12 hold ratings, and 9 buy ratings on the stock.