Walt Disney vs. Netflix: Which Media Stock Is a Better Buy in 2026?

John Ballard, The Motley Fool

Fri, September 4, 2026 at 8:40 PM GMT+3 5 min read

As the entertainment landscape shifts from traditional cable to digital dominance, which media giant is the better addition to your portfolio? This comparison evaluates Walt Disney (NYSE:DIS) against Netflix (NASDAQ:NFLX).

Disney is a diversified entertainment giant that couples its streaming aspirations with a massive physical presence in theme parks. Netflix is the industry pioneer, focusing almost exclusively on digital content delivery and subscriber scale. Comparing these companies helps you decide between a legacy titan and a high-growth streaming leader.

The case for Walt Disney

The Walt Disney Company is one of the Big 6 media companies, with a portfolio that includes streaming, theme parks, and media networks. The company leverages its iconic intellectual property to drive revenue across Disney+ and its extensive vacation experiences. It maintains essential distribution agreements with multi-channel video providers.

In fiscal 2025 (ending in September), revenue reached nearly $94 billion, representing approximately 3% growth over the prior year. The company reported net income of roughly $12 billion, which was a significant increase from the $5 billion earned in fiscal 2024. This performance was supported by a net margin of nearly 13%, indicating improved bottom-line performance.

As of its September 2025 balance sheet, the debt-to-equity ratio is approximately 0.3x. This ratio compares total debt to the value of shareholder equity, indicating that Disney carries a moderate amount of leverage relative to its ownership stake.

The current ratio is nearly 0.7x, which measures the company's ability to pay its short-term debts with current assets. Free cash flow for the year was roughly $10 billion, representing the cash remaining after the company covers its operating expenses and capital expenditures.

The case for Netflix

Netflix operates as a pure-play streaming service with over 300 million paid memberships in more than 190 countries as of early 2026. The company delivers content directly to consumers and, through partnerships with telecommunications operators, integrates its service into set-top boxes.

For 2025, revenue reached $45 billion, which marked an increase of nearly 16% year-over-year. The company reported net income of close to $11 billion, up from $8.7 billion in the previous fiscal year. Its net margin was approximately 24%, indicating a high level of efficiency in converting revenue into profit.

Based on its December 2025 balance sheet, the debt-to-equity ratio is roughly 0.5x. This illustrates that for every dollar of equity, the company has fifty cents in total debt.

The current ratio is approximately 1.2x, indicating that current assets are sufficient to cover short-term liabilities. Free cash flow reached nearly $9.5 billion, representing the cash a company generates after accounting for cash outflows to support operations, including content production.

Risk profile comparison

Disney faces intense pressure from other streaming services and traditional media providers, which can impact subscription and advertising revenue. It also deals with high costs for sports programming rights and carries risks of inflationary pressure on production.

The company recently finalized a $50 million settlement to resolve antitrust claims arising from bundling practices that affected subscribers to live TV streaming services, such as FuboTV.

Netflix faces competition for consumer leisure time from a wide variety of sources, including video games and traditional broadcasters. The company also carries risks of operational disruption related to its reliance on third-party cloud infrastructure and potential content-related legal proceedings.

Valuation comparison

Netflix currently carries a higher price tag relative to its P/S ratio and Forward P/E based on future earnings estimates when compared to Disney.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

On almost every measure, Netflix looks like the stronger business and better stock to buy. It's growing revenue at double-digit rates, not only demonstrating stronger growth prospects but also showing that its strategy to maintain a healthy level of revenue per subscriber is working.

Netflix trades at a higher valuation multiple relative to sales and earnings, but that reflects a higher rate of growth and streaming profitability compared to Disney. For example, Disney+ is still operating at a single-digit operating margin, while Netflix reported a stellar 33% margin in the second quarter.

Moreover, the recent pullback in Netflix stock may offer investors a timely buying opportunity. The stock's forward P/E of about 23x is not asking much for a business that analysts expect to grow earnings over 20% annually in the coming years. On the same score, Wall Street analysts expect low-single-digit earnings growth from Disney.

The setup for Netflix looks more attractive for investors right now. Its scale, brand, and growth could deliver superior returns for investors.

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John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.

Walt Disney vs. Netflix: Which Media Stock Is a Better Buy in 2026? was originally published by The Motley Fool