Disney just made a game-changing move. Here’s what you need to know.

A lot of news came from The The Walt Disney Company (DIS 0.57%) this month, with a highly anticipated earnings release published on August 7th and the annual D23 fan event taking place just a few days ago. Many of its announcements were positive, with the company beating earnings expectations and posting a profit in streaming for the first time.

Encouraging growth and multiple box office gains prompted Disney executives to make a move that illustrates a vote of confidence in the company’s future. In the coming years, it will invest heavily in the UK and mainland Europe to produce films and television shows for the big screen and its streaming platform, Disney+.

The decision comes after two mega wins at the box office. Disney was the only company to make $1 billion in ticket sales this year, and it did so not just once in 2024, but twice. The company has come back strong this year and could be on a promising growth path.

So here’s everything you need to know about his game-changing move and why his stock is a no-brainer buy right now.

Disney is making a major investment in Europe

On August 9, news broke that Disney would spend at least $5 billion over the next five years producing movies and TV shows in the UK and Europe.

The significant investment comes after its launch Deadpool and Wolverine on July 26, which has seemingly breathed new life into its previously struggling Marvel Cinematic Universe. The film earned $1 billion worldwide, only the second film in 2024 to do so — after Disney. Inside Out 2.

Jan Koeppen, Disney’s president of Europe, the Middle East and Africa, thinks he will win dead pool proves that his Marvel franchise “seems to have a lot of life left in it.” He added: “It feels like we’re in a movie game again, which is fantastic.”

Disney has spent about $3.5 billion over the past five years on UK film production, but that will increase to $1 billion annually in the UK and across Europe. The increased investment is exciting because it looks like the company has found its stride and is continuing to expand. Koeppen called Disney one of the fastest-growing media companies in his region of the world and believes it has much more growth ahead.

A massive streaming win

Disney reported third-quarter earnings earlier this month. Revenue rose 4% year-over-year and beat Wall Street forecasts by $70 million. Earnings per share (EPS) of $1.39 beat estimates by $0.20. Despite slower growth in its theme parks attributed to headwinds, the quarter was generally positive thanks to the massive gain in streaming.

The period’s biggest performance arguably came from its direct-to-consumer division, with streaming service Disney+ reaching profitability a quarter earlier than expected. Total operating income for the period rose 19% year-over-year, driven primarily by streaming, which generated an operating profit of $47 million, vastly improving from the $512 million loss in a year ago

The streaming gain came alongside news of planned price hikes in mid-October, which will increase monthly subscription rates by $1 to $2. The move is likely to further improve operating margins, increasing its revenue per subscriber.

Streaming can be a tough industry to succeed in, as evidenced by the consistent obstacles of rivals such as The discovery of Warner Bros and Comcast they faced. As a result, Disney+ achieving profitability bodes well for the company’s future, diversifying its businesses and illustrating the potency of its brand.

Creating engaging content will be crucial to driving Disney+ subscriptions, making increased investment in Europe a positive move for the company’s long-term future.

Trade at the best value in months

Disney has had a challenging few years. Its stock has fallen 38% since 2019 as the company has had to contend with a global pandemic, a subsequent economic downturn and a costly expansion of its new streaming business.

However, recent earnings suggest the company is finally turning around, and now could be an opportunity to pick up its stock at a bargain.

Data by YCharts.

This chart shows Disney’s price-to-earnings (P/E) ratio and price-to-sales (P/S) ratio are well below their five-year averages. On their own, those numbers would make Disney stock a bargain. However, comparing them to their five-year averages only strengthens the bullish case for Disney shares, which are trading at their best value in years.

Disney has made some game-changing moves that have put their business on an exciting growth trajectory. Along with a bargain stock price, its stock is an unusual buy right now.