“The streaming multiple” is a Price-to-Earnings ratio that reflects bullish sentiment for a stock from investors: Netflix, the only pure play streaming company, is currently at 77.4, Disney’s is at 51.22, and, for comparison, ViacomCBS’s is at 14.84. It can also reflect sentiment that may be irrationally bullish: Liberty Media’s John Malone thinks both Netflix and Disney stocks are “overpriced”.
Should the Netflix streaming multiple apply to Disney? Or should it be an ecosystem multiple, something reflected more in similar businesses than in Netflix? We are going to get some concrete answers from Disney on December 10 at its Investors Day as to why it thinks the streaming multiple should apply.
In the meantime, there are some helpful guideposts to thinking through an answer to this question that we can glean from recent data.