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- 1 WBD Stock rallied 3.47% in a month and is battling to defeat a bull trap.
- 2 Declining ad spending is believed to be the reason for the drop in stock price.
Warner Bros. Discovery Inc. (NASDAQ: WBD) rallied 29.95% YTD, but due to concerns over falling ad spending, WBD Stock fell 1.03%. Wolfe Research now turned bearish on Warner Bros. and Paramount, citing a concerning decline in ad revenue. Peter Supino argues that advertising revenue can be considered pure profit, and a noticeable reduction affects profitability.
Warner Bros. Discovery (WBD Stock) – Financial Analysis
The S&P Index surged 0.64%, the Dow Jones Industrial Index hiked by 0.29%, and the NASDAQ100 Index swelled by 0.9%. The jump can be attributed to the United States June Payrolls report, which shows that the nonfarm payroll gained is 209,000, while the expectations were 230,000.
Warner Bros. peer Paramount also reported a steep decline in TV advertisement spending. Supino says that customarily the advertisers spend upfront before the start of the new TV season. But this scenario is changing soon, even if the COVID-19 pandemic aftermath is not considered.
Penserra Capital Management LLC raised its stakes by 139,011.4% in Q1 2023 and bought 183,495 shares. Hence current portfolio is worth $2.77 Million. Fifth Third Bancorp increased its position by 21.2%; they own 94,186 shares worth $1.42 Million. Many institutional investors and hedge funds altered their position in Warner Bros. Discovery Inc., indicative of an active stock garnering their attention.
At press time, WBD stock is trading at $12.54 with a fall of 1.03%; previous close and open were at $12.67 and $12.55, respectively. The 52-week range is from $8.82 to $17.65, and the current price is close to the upper spectrum. With an average volume of 21.03 Million shares, the market price is $30.549 Billion.
NASDAQ: WBD rallied 15.26% in six months and fell 12.37% in a year. The trailing twelve-month (ttm) price-to-earnings (P/E) ratio is negative $4.98. Analysts placed a price target at $20.55 with an upside of 63.9%, foreshadowing positive momentum. At the same time, they provided a 2.60 rating for moderate buy.
The last earnings report was released on May 5, 2023, where the reported revenue of $10.7 Billion failed to beat the estimated value of $10.751 Billion by 0.48%. The (ttm) revenue is $41.36 Billion, while revenue per share (ttm) is $17.23. The year-over-year (YoY) quarterly revenue growth hiked by a whopping 238.70%.
Profit margin dropped by 21.51%, and operating margin fell by 7.46%, while (ttm) gross profit claimed to be $13.43 Billion. Total cash in hand at the end of the most recent quarter (mrq) is $2.63 Billion, while the total debt on the company in a similar time frame is $48.93 Billion.
Warner Bros. Discovery Inc. (WBD Stock) – Candle Exploration
In June 2023, a steep rise in WBD share price fell suddenly, apparently creating a bull trap. However, the trap can be confirmed only after the price hits the bottom of the demand zone. If the EMA attains an ascending trajectory, the price could break the trend line and cross R1 at $14.14. However, a bullish momentum would only be achieved after it crosses R2 at $15.62.
If the price falls below the demand zone, the $8.75 mark is strong support. Chances of the price falling below this point are rare. Also, the price action should consolidate here for some time before deciding on further momentum.
Disclaimer:
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets and stocks comes with a risk of financial loss.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
