Warner Bros. Discovery (NASDAQ:WBD) vs. iHeartMedia (NASDAQ:IHRT) Financial Analysis

Warner Bros. Discovery (NASDAQ:WBD) and iHeartMedia (NASDAQ:IHRT) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Warner Bros. Discovery and iHeartMedia”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Warner Bros. Discovery	$37.30 billion	1.82	$727.00 million	$0.29	93.52
iHeartMedia	$3.86 billion	0.22	-$472.87 million	($3.07)	-1.85

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Warner Bros. Discovery	-4.67%	-4.66%	-1.72%
iHeartMedia	-12.24%	-1.63%	-1.46%

Insider & Institutional Ownership

60.0% of Warner Bros. Discovery shares are held by institutional investors. Comparatively, 93.9% of iHeartMedia shares are held by institutional investors. 1.9% of Warner Bros. Discovery shares are held by company insiders. Comparatively, 10.2% of iHeartMedia shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Warner Bros. Discovery and iHeartMedia, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Warner Bros. Discovery	3	14	6	1	2.21
iHeartMedia	2	2	0	0	1.50

Warner Bros. Discovery currently has a consensus price target of $26.36, indicating a potential downside of 2.82%. iHeartMedia has a consensus price target of $4.25, indicating a potential downside of 25.04%. Given Warner Bros. Discovery’s stronger consensus rating and higher possible upside, research analysts plainly believe Warner Bros. Discovery is more favorable than iHeartMedia.

Volatility and Risk

Warner Bros. Discovery has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500. Comparatively, iHeartMedia has a beta of 2.33, indicating that its stock price is 133% more volatile than the S&P 500.

Summary

Warner Bros. Discovery beats iHeartMedia on 9 of the 15 factors compared between the two stocks.

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.

About iHeartMedia

iHeartMedia, Inc. operates as an audio media company in the United States and internationally. It operates through three segments: Multiplatform Group, Digital Audio Group, and Audio & Media Services Group. The Multiplatform Group segment offers broadcast radio stations, sponsorship and events, and live and virtual events; and operates Premiere Networks, a national radio network that produces, distributes, or represents syndicated radio programs and services to radio station affiliates. It also delivers real-time traffic flow and incident information, and weather updates, sports, and news. The Digital Audio Group segment provides podcasting, digital sites, newsletters, digital services, and programs; and iHeartRadio, a mobile app and web based service for radio stations, digital only stations, custom artist stations, and podcasts. The Audio and Media Services Group segment engages in the media representation business; and provides scheduling and broadcast software and services. This segment also provides RCS, a cloud and on-premises broadcast software, such as radio and television automation, music scheduling, newsroom automation, advertising sales management, disaster recovery solutions; and real-time audio recognition technology to radio and television stations, cable channels, record labels, advertisers, and agencies, as well as media streaming and research services. The company was formerly known as CC Media Holdings, Inc. and changed its name to iHeartMedia, Inc. in September 2014. The company is headquartered in San Antonio, Texas.