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Discovery Inc C DISCK

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Discovery Starts 2021 With Mixed Q1; Discovery+ Off to a Strong Start With 13 Million Subs

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Discovery posted a mixed start to 2021 as first-quarter revenue was in-line while adjusted EBITDA fell short of FactSet consensus projections. Weak U.S. ad revenue on lower ratings limited revenue growth while investments in content and the launch of Discovery+ hit margins. Despite the struggles at the traditional business, investors appear to be focused on the streaming business with the launch of Discovery+ in January. The service ended the quarter with 13 million subscribers, a relatively strong start. We are maintaining our narrow moat and $39 fair value estimate.

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Company Profile

Business Description

Discovery is the one of the largest global media providers with over 2 billion cumulative subscribers in over 220 countries. Its three traditional networks (Discovery, TLC, and Animal Planet) each reach over 84 million U.S. households and more than 200 million international subscribers. The top two networks (HGTV and Food Network) acquired in the Scripps transaction are available in more than 87 million households in the U.S. The international segment consists of national and pan-regional networks over 294 unique distribution feeds in 50 languages.

8403 Colesville Road
Silver Spring, MD, 20910
T +1 240 662-2000
Sector Communication Services
Industry Entertainment
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 9,800