How the latest earnings reset expectations for Walt Disney stock

Walt Disney (DIS) just posted its third quarter results, giving you a fresh snapshot of how the business is balancing growth in key segments with pressure on profitability and the stock’s longer term performance.

For the quarter ended June 27, 2026, revenue came in at US$25.25b compared with US$23.65b a year earlier, while net income declined to US$2.64b from US$5.26b. Earnings per share from continuing operations roughly halved versus the prior year period on both a basic and diluted basis.

Over the first nine months of the fiscal year, Walt Disney reported revenue of US$76.40b versus US$71.96b a year ago. Net income for this period declined to US$7.29b from US$11.09b, with basic and diluted earnings per share from continuing operations also lower than a year earlier.

These mixed earnings sit against a stock that has fallen about 40% over the past five years, even though the share price has risen over the past month and over the past 3 months. At the last close of US$103.18, Walt Disney carries a market value of about US$181.15b. Company level models suggest the stock is trading close to estimated intrinsic value, with some evidence of undervaluation based on earnings.

Over the past year, Walt Disney’s total shareholder return declined about 7%, while the share price is down about 8% year to date despite a recent 1 month share price gain of almost 8%. That mix points to improving short term momentum as investors weigh the latest earnings, the plan to turn Disney+ into a broader fan ecosystem, and ongoing investment in parks capacity against the longer term 3 year total shareholder return of about 20% and the 5 year total shareholder return decline of around 41%.

If you are comparing Disney’s ecosystem push with other long term growth stories, it can help to widen the lens and see what stands out in the market right now. A good next step is to scan a curated list of companies benefiting from similar long run themes using the 19 top founder-led companies

The recent bounce in Walt Disney shares has closed some of the obvious gap to fair value. The key issue now is how much potential return still sits ahead rather than already priced in, which is where the valuation work starts.

Most Popular Narrative: 23.4% Undervalued

According to the most followed narrative on Walt Disney, a fair value of $134.63 sits well above the last close at $103.18. This frames the stock as meaningfully mispriced by the market.

Disney is a high-quality and innovative company with a proven record of benefitting from disruption, which has been consistently priced as if it were an aging dinosaur. It isn't. Instead, I believe it's undervalued, and once the latest "concern" is crossed out, its share price will start to rise again.

Want to see what sits behind that fair value for Walt Disney? The narrative leans on stronger profitability, healthier margins and a richer future earnings multiple. Curious which assumptions really move the price?

Result: Fair Value of $134.63 (UNDERVALUED)

However, this Walt Disney narrative could still be challenged if streaming margins stall below targets or if further leadership changes unsettle plans for Experiences and ESPN.

Next Steps

Reading this mixed picture on Walt Disney and wondering what really matters most right now? Move quickly to check both sides of the story with the 4 key rewards and 1 important warning sign

Looking for more Walt Disney style investment ideas?

If Walt Disney has you thinking harder about where to put fresh capital next, do not stop here. Your next strong idea may be only a few filters away.

• Target reliable cash generators by scanning companies with resilient balance sheets and steady fundamentals using the solid balance sheet and fundamentals stocks screener (48 results).
• Spot potential value opportunities early by reviewing companies that screen as attractively priced through the 51 high quality undervalued stocks.
• Hunt for underfollowed opportunities by checking a screener containing 21 high quality undiscovered gems before other investors catch on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.