Disney+ Subscriber Growth Is Worse Than It Looks

Walt Disney (NYSE: DIS) stock is down nearly 50% from its all-time high despite blowing Disney+ subscriber estimates out of the water and seeing a rebound in its domestic parks. For its fiscal 2022 second quarter, Disney was expected to add roughly five million Disney+ subscribers, but it actually added 7.9 million. However, it also missed earnings estimates as high spending hurt the bottom line. 

Despite the earnings miss, Disney+ has continued to grow at a faster pace than anyone could have ever hoped for. For the longest time, subscriber growth was all that was needed to pole-vault streaming stocks like Netflix to new heights. That paradigm seems to have changed as investors are now concerned with the long-term profitability of the increasingly saturated streaming industry.

Here's why Disney's numbers weren't as good as they seemed, and why that is a red flag for investors.

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Source Fool.com