Critical Review: Starz Entertainment (NASDAQ:STRZ) vs. Warner Bros. Discovery (NASDAQ:WBD)

Starz Entertainment (NASDAQ:STRZ) and Warner Bros. Discovery (NASDAQ:WBD) are both communication services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, profitability, analyst recommendations, valuation and risk.

Earnings & Valuation

This table compares Starz Entertainment and Warner Bros. Discovery”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Starz Entertainment	$1.32 billion	0.27	-$115.80 million	($25.49)	-0.83
Warner Bros. Discovery	$37.30 billion	2.08	$727.00 million	($1.27)	-24.30

Warner Bros. Discovery has higher revenue and earnings than Starz Entertainment. Warner Bros. Discovery is trading at a lower price-to-earnings ratio than Starz Entertainment, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Starz Entertainment has a beta of 2.44, meaning that its share price is 144% more volatile than the S&P 500. Comparatively, Warner Bros. Discovery has a beta of 1.57, meaning that its share price is 57% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Starz Entertainment and Warner Bros. Discovery, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Starz Entertainment	1	3	4	1	2.56
Warner Bros. Discovery	2	13	6	2	2.35

Starz Entertainment presently has a consensus price target of $32.71, indicating a potential upside of 55.26%. Warner Bros. Discovery has a consensus price target of $28.34, indicating a potential downside of 8.17%. Given Starz Entertainment’s stronger consensus rating and higher probable upside, research analysts clearly believe Starz Entertainment is more favorable than Warner Bros. Discovery.

Profitability

This table compares Starz Entertainment and Warner Bros. Discovery’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Starz Entertainment	-33.98%	-25.64%	-6.79%
Warner Bros. Discovery	-8.77%	-8.91%	-3.20%

Institutional and Insider Ownership

60.0% of Warner Bros. Discovery shares are owned by institutional investors. 22.6% of Starz Entertainment shares are owned by company insiders. Comparatively, 0.7% of Warner Bros. Discovery shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Warner Bros. Discovery beats Starz Entertainment on 10 of the 15 factors compared between the two stocks.

About Starz Entertainment

Starz is a premium cable and streaming network owned by Starz Entertainment, which was formerly a part of Lionsgate. Starz had about 20 million subscribers in the U.S. and Canada as of Dec. 31, 2024. The company’s franchises include “Outlander” and “Power.”

About Warner Bros. Discovery

Warner Bros. Discovery, Inc. operates as a media and entertainment company worldwide. It operates through three segments: Studios, Network, and DTC. The Studios segment produces and releases feature films for initial exhibition in theaters; produces and licenses television programs to its networks and third parties and direct-to-consumer services; distributes films and television programs to various third parties and internal television; and offers streaming services and distribution through the home entertainment market, themed experience licensing, and interactive gaming. The Network segment comprises domestic and international television networks. The DTC segment offers premium pay-tv and streaming services. In addition, the company offers portfolio of content, brands, and franchises across television, film, streaming, and gaming under the Warner Bros. Motion Picture Group, Warner Bros. Television Group, DC, HBO, HBO Max, Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT Sports, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings brands. Further, it provides content through distribution platforms, including linear network, free-to-air, and broadcast television; authenticated GO applications, digital distribution arrangements, content licensing arrangements, and direct-to-consumer subscription products. Warner Bros. Discovery, Inc. was incorporated in 2008 and is headquartered in New York, New York.