Key Points
-
Despite being the leader in streaming entertainment, Netflix’s expensive valuation can’t be ignored.
-
In addition to soaring streaming profits, Disney’s lower forward price-to-earnings ratio can be a winning combination.
Netflix (NASDAQ: NFLX) shares have skyrocketed 25,740% in the past 20 years (as of March 12). Investors looking to score monster returns might look at this kind of performance and consider buying this streaming stock.
However, Walt Disney (NYSE: DIS), whose shares trade 51% below their peak, has a convincing argument for investment as well. Which of these stocks will make you richer going forward?
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Walt Disney Pictures logo on smartphone.
Image source: Getty Images.
Netflix dominates, but the valuation reflects this position
With its massive subscriber base of 325 million and 2025 revenue of $45 billion, Netflix is a dominant force in the streaming market. Investors who got in years ago have reaped the rewards.
Now it’s time to be critical of the valuation. Shares trade at a forward price-to-earnings (P/E) ratio of 30, which isn’t cheap, especially with the likelihood that growth will decelerate in the future.
Disney shares are cheaper, and streaming profits are soaring
From a valuation perspective, the House of Mouse wins the battle. Investors can buy Disney stock at a forward P/E multiple of 15, representing a 50% haircut to Netflix.
Disney’s entertainment streaming segment (including Disney+ and Hulu’s streaming operations) has quickly become significantly profitable. Operating income skyrocketed 828% year over year in fiscal 2025 (ended Sept. 27, 2025). The leadership team expects this figure to soar again in fiscal 2026.
Moreover, Disney has a robust experiences segment that provides diversification from a financial perspective.
Investors buying in now who choose Disney shares, instead of Netflix, are positioned to produce a better return over the next five years.
Should you buy stock in Walt Disney right now?
Before you buy stock in Walt Disney, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walt Disney wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $514,000!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,105,029!*
Now, it’s worth noting Stock Advisor’s total average return is 930% — a market-crushing outperformance compared to 187% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 15, 2026.
Neil Patel 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.