Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin6.2%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin-32.8%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
F
Years to Pay Off Debt-11.1 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$35.3B
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital-$4.4B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
C
Price-to-Book2.02x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
C
Free Cash Flow-$476M
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings$1.1B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About Warner Bros. Discovery, Inc.
Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Streaming, Studios, and Global Linear Networks. The Streaming segment offers streaming services, such as HBO Max and discovery+, and premium pay-TV services, including HBO and certain premium sports streaming products for mobile and connected TV devices. The Studios segment is involved in the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and its networks/streaming services. This segment also distributes films and television programs to various third-party and internal television, streaming services, and physical and digital home entertainment markets; related consumer products and themed experience licensing; and publishes, develops, licenses, and distributes content for the interactive space in platforms, including console, handheld, mobile, and PC-based gaming for both internal and third-party game titles. The Global Linear Networks segment provides general and lifestyle entertainment networks, news networks; and hosts international media networks and global sports networks. In addition, the company offers a portfolio of content and products for television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products under the Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and other brands. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.
Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Streaming, Studios, and Global Linear Networks. The Streaming segment offers streaming services, such as HBO Max and discovery+, and premium pay-TV services, including HBO and certain premium sports streaming products for mobile and connected TV devices. The Studios segment is involved in the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and its networks/streaming services. This segment also distributes films and television programs to various third-party and internal television, streaming services, and physical and digital home entertainment markets; related consumer products and themed experience licensing; and publishes, develops, licenses, and distributes content for the interactive space in platforms, including console, handheld, mobile, and PC-based gaming for both internal and third-party game titles. The Global Linear Networks segment provides general and lifestyle entertainment networks, news networks; and hosts international media networks and global sports networks. In addition, the company offers a portfolio of content and products for television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products under the Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and other brands. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Net Income From Continuing Operation Net Minority Interest
-2,916,000
-252,000
Reconciled Depreciation
3,725,000
4,077,000
Reconciled Cost Of Revenue
2,144,000
2,461,000
EBITDA
1,186,000
4,253,000
EBIT
-2,539,000
176,000
Net Interest Income
-559,000
-548,000
Interest Expense
581,000
584,000
Interest Income
22,000
36,000
Normalized Income
-26,765
-40,113
Net Income From Continuing And Discontinued Operation
-2,916,000
-252,000
Total Expenses
8,344,000
8,924,000
Total Operating Income As Reported
-2,469,000
349,000
Diluted Average Shares
2,492,000
2,454,000
Basic Average Shares
2,492,000
2,454,000
Diluted EPS
0
0
Basic EPS
0
0
Diluted NI Availto Com Stockholders
-2,916,000
-251,000
Net Income Common Stockholders
-2,916,000
-251,000
Net Income
-2,916,000
-252,000
Minority Interests
-10,000
-5,000
Net Income Including Noncontrolling Interests
-2,906,000
-247,000
Net Income Continuous Operations
-2,906,000
-247,000
Tax Provision
-214,000
-161,000
Pretax Income
-3,120,000
-408,000
Other Income Expense
-3,110,000
-396,000
Other Non Operating Income Expenses
-3,000
-7,000
Special Income Charges
-3,048,000
-321,000
Gain On Sale Of Business
0
-9,000
Other Special Charges
30,000
134,000
Impairment Of Capital Assets
14,000
10,000
Restructuring And Mergern Acquisition
3,004,000
177,000
Earnings From Equity Interest
-5,000
-39,000
Gain On Sale Of Security
-54,000
-29,000
Net Non Operating Interest Income Expense
-559,000
-548,000
Interest Expense Non Operating
581,000
584,000
Interest Income Non Operating
22,000
36,000
Operating Income
549,000
536,000
Operating Expense
3,701,000
3,701,000
Depreciation Amortization Depletion Income Statement
1,226,000
1,315,000
Depreciation And Amortization In Income Statement
1,226,000
1,315,000
Selling General And Administration
2,475,000
2,386,000
Gross Profit
4,250,000
4,237,000
Cost Of Revenue
4,643,000
5,223,000
Total Revenue
8,893,000
9,460,000
Operating Revenue
8,640,000
9,153,000
Balance Sheet
2026
2025
2024
Treasury Shares Number
230,000
230,000
Preferred Shares Number
13,000
13,000
Ordinary Shares Number
2,506,768
2,480,000
Share Issued
2,736,768
2,710,000
Net Debt
29,202,000
28,001,000
Total Debt
32,466,000
32,567,000
Tangible Book Value
-39,411,000
-36,892,000
Invested Capital
65,044,000
68,486,000
Working Capital
-4,374,000
706,000
Net Tangible Assets
-39,411,000
-36,892,000
Common Stock Equity
32,578,000
35,919,000
Total Capitalization
63,551,000
68,347,000
Total Equity Gross Minority Interest
33,707,000
37,166,000
Minority Interest
1,129,000
1,247,000
Stockholders Equity
32,578,000
35,919,000
Gains Losses Not Affecting Retained Earnings
-642,000
-407,000
Other Equity Adjustments
-642,000
-407,000
Treasury Stock
8,244,000
8,244,000
Retained Earnings
-14,428,000
-11,512,000
Additional Paid In Capital
55,865,000
56,055,000
Capital Stock
27,000
27,000
Common Stock
27,000
27,000
Total Liabilities Net Minority Interest
64,130,000
62,919,000
Total Non Current Liabilities Net Minority Interest
48,015,000
50,419,000
Other Non Current Liabilities
11,169,000
11,608,000
Non Current Deferred Liabilities
5,873,000
6,383,000
Non Current Deferred Taxes Liabilities
5,873,000
6,383,000
Long Term Debt And Capital Lease Obligation
30,973,000
32,428,000
Long Term Debt
30,973,000
32,428,000
Current Liabilities
16,115,000
12,500,000
Current Deferred Liabilities
1,592,000
1,642,000
Current Deferred Revenue
1,592,000
1,642,000
Current Debt And Capital Lease Obligation
1,493,000
139,000
Current Debt
1,493,000
139,000
Other Current Borrowings
139,000
2,748,000
Payables And Accrued Expenses
13,030,000
10,719,000
Current Accrued Expenses
11,920,000
8,958,000
Payables
1,110,000
1,761,000
Total Tax Payable
668,000
644,000
Accounts Payable
1,110,000
1,093,000
Total Assets
97,837,000
100,085,000
Total Non Current Assets
86,096,000
86,879,000
Other Non Current Assets
7,465,000
7,383,000
Goodwill And Other Intangible Assets
71,989,000
72,811,000
Other Intangible Assets
46,115,000
46,878,000
Goodwill
25,874,000
25,933,000
Net PPE
6,642,000
6,685,000
Accumulated Depreciation
-4,826,000
-4,035,000
Gross PPE
11,511,000
10,122,000
Construction In Progress
819,000
601,000
Machinery Furniture Equipment
6,654,000
5,689,000
Properties
4,038,000
3,832,000
Current Assets
11,741,000
13,206,000
Other Current Assets
3,468,000
1,952,000
Prepaid Assets
322,000
784,000
Receivables
5,009,000
6,366,000
Other Receivables
1,072,000
979,000
Accounts Receivable
5,009,000
5,294,000
Cash Cash Equivalents And Short Term Investments
3,264,000
4,566,000
Cash And Cash Equivalents
3,264,000
4,566,000
Cash Flow
2026
2025
2024
Free Cash Flow
-476,000
1,383,000
Repayment Of Debt
-400,000
-1,880,000
Issuance Of Debt
261,000
677,000
Capital Expenditure
-268,000
-421,000
Interest Paid Supplemental Data
Income Tax Paid Supplemental Data
End Cash Position
3,268,000
4,570,000
Beginning Cash Position
4,570,000
4,298,000
Effect Of Exchange Rate Changes
-56,000
3,000
Changes In Cash
-1,246,000
269,000
Financing Cash Flow
-756,000
-1,117,000
Cash Flow From Continuing Financing Activities
-756,000
-1,117,000
Net Other Financing Charges
-617,000
86,000
Net Issuance Payments Of Debt
-139,000
-1,203,000
Short Term Debt Payments
-261,000
-677,000
Short Term Debt Issuance
261,000
677,000
Net Long Term Debt Issuance
-139,000
-1,203,000
Long Term Debt Payments
-139,000
-1,203,000
Long Term Debt Issuance
0
0
Investing Cash Flow
-282,000
-418,000
Cash Flow From Continuing Investing Activities
-282,000
-418,000
Net Other Investing Changes
11,000
-20,000
Net Investment Purchase And Sale
0
26,000
Sale Of Investment
0
26,000
Net Business Purchase And Sale
-25,000
-3,000
Purchase Of Business
-25,000
-3,000
Net PPE Purchase And Sale
-268,000
-421,000
Purchase Of PPE
-268,000
-421,000
Operating Cash Flow
-208,000
1,804,000
Cash Flow From Continuing Operating Activities
-208,000
1,804,000
Change In Working Capital
-3,599,000
-1,935,000
Change In Other Working Capital
-2,812,000
9,092,000
Change In Payables And Accrued Expense
-1,033,000
-10,891,000
Change In Payable
-1,033,000
-10,891,000
Change In Account Payable
-1,033,000
510,000
Change In Receivables
246,000
-136,000
Other Non Cash Items
2,919,000
144,000
Stock Based Compensation
152,000
229,000
Asset Impairment Charge
14,000
10,000
Deferred Tax
-513,000
-438,000
Deferred Income Tax
-513,000
-438,000
Depreciation Amortization Depletion
3,725,000
4,077,000
Depreciation And Amortization
3,725,000
4,077,000
Amortization Cash Flow
2,499,000
2,762,000
Amortization Of Intangibles
2,499,000
2,762,000
Depreciation
1,226,000
1,315,000
Operating Gains Losses
-36,000
-3,000
Earnings Losses From Equity Investments
49,000
37,000
Gain Loss On Investment Securities
-93,000
2,000
Net Income From Continuing Operations
-2,906,000
-247,000
📊Quarterly mode — Graham Fair Value & 7 Criteria require annual data. Switch to Annual for full analysis.
Quarter vs Same Quarter Last Year
YoY strips seasonality
Revenue Growth (YoY)
Prior year: $9.0B▼ $8.9B-1.0%
Revenue growth vs same quarter last year strips seasonality. Consistent double-digit growth is a Buffett hallmark.
Gross Margin
Prior year: 42.9%▲ 47.8%+4.9pp
Buffett: consistent gross margin above 40% signals durable pricing power and competitive moat.
Operating Margin
Prior year: 6.1%▲ 6.2%+0.1pp
Graham: operating margin reflects true business economics before financing. Trend matters as much as level.
Net Margin
Prior year: -5.0%▼ -32.8%-27.7pp
Net margin can be distorted by one-time items, tax timing, or interest costs — compare to operating margin for signal quality.
Quarterly Health Checks
3 Graham/Buffett criteria that are valid and reliable on quarterly data
✅ Adequate Size
Graham required scale for resilience. Quarterly revenue × 4 gives an annualised proxy.
$8.9B/qtr (≈$35.6B ann.)
vs > $1.5B annualised revenue
❌ Financial Condition
Current assets vs current liabilities — a real-time liquidity snapshot. Valid and reliable on quarterly data.
0.73x current ratio
vs ≥ 2.0x
❌ Free Cash Flow
Buffett's most important single metric. A positive FCF quarter means the business generated real cash for owners after maintaining its asset base.
-$476M
vs Positive
Operating Cash Flow
-$208M
Latest quarter · Buffett's cash reality check
ROIC
0.5%
Based on latest annual operating income
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Market Cap / Net Assets
1.9x
Net Assets: $33.7B
Asset Context — Entertainment
Platform and internet businesses derive value from network effects, user data, and brand — intangibles that accounting rules don't capitalise. A low or negative Net Assets figure is expected and not a risk signal. ROIC and FCF per share are more relevant valuation anchors.
⚠️Net margin compressed 27.7pp vs same quarter last year. Common causes: one-time charges (restructuring, write-downs, legal settlements), tax rate changes, or rising interest expense. Check the income statement notes before drawing conclusions about operating health.
⚠️Operating income is positive but net income is negative. This typically reflects below-the-line items: interest expense, impairment charges, tax adjustments, or one-time write-offs. The core business may be healthy — operating margin is a better signal of ongoing profitability here.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
4.22%
Moderate — some alignment with shareholders
Return on Equity (ROE)
-9.0%
Weak — poor returns on equity
Return on Assets (ROA)
-3.0%
Poor — assets are not generating adequate returns
Debt Trend YoY
-0.3% YoY
Debt is declining — management is deleveraging
Leadership Team
David Zaslav
President, CEO & Director
Age 65
Pay: $32,818,441
Gunnar Wiedenfels Ph.
Senior EVP & CFO
Age 48
Pay: $7,392,728
Bruce Campbell
COO and Chief Revenue & Strategy Officer
Age 58
Pay: $10,609,332
Jean-Briac Perrette
President and CEO of Global Streaming & Games
Age 54
Pay: $10,587,986
Peter Lee
Senior Vice President of Investor Relations
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
7.77%
194,804,215
Vanguard Capital Management LLC
6.26%
156,908,590
State Street Corporation
5.08%
127,429,710
Vanguard Portfolio Management LLC
4.12%
103,397,641
Geode Capital Management, LLC
2.79%
69,939,523
Pentwater Capital Management Lp
2.00%
50,245,000
Millennium Management Llc
1.75%
43,939,392
Harris Associates L.P.
1.31%
32,874,039
⚠️Current ratio below 1 — liquidity risk
Risk Analysis
Beta (Market Risk)
1.55
High volatility — moves more than the market
Short Interest
2.4% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.96x
Conservative balance sheet — low financial risk
Current Ratio
0.73x
Weak liquidity — current liabilities exceed current assets
52-Week Price Range
Low: $10.27Current: $26.20High: $30.00
Currently at 81% of 52-week range
Warner Bros. Discovery, Inc. (WBD) fundamental analysis — Overall grade F based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: N/A (negative EPS). Gross profit margin: 47.8%. Operating margin: 6.2%. Net margin: -32.8%. Market cap: $65.7B. Sector: Communication Services. Industry: Entertainment. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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