Warner Bros. Discovery (NASDAQ:WBD) & Gray Media (NYSE:GTN) Critical Analysis

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

Risk & Volatility

Gray Media has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Warner Bros. Discovery has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Insider and Institutional Ownership

78.6% of Gray Media shares are held by institutional investors. Comparatively, 60.0% of Warner Bros. Discovery shares are held by institutional investors. 15.2% of Gray Media shares are held by company insiders. Comparatively, 1.8% of Warner Bros. Discovery shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Gray Media	2.81%	5.50%	1.17%
Warner Bros. Discovery	1.28%	1.34%	0.47%

Earnings & Valuation

This table compares Gray Media and Warner Bros. Discovery”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gray Media	$3.64 billion	0.12	$375.00 million	$0.41	10.63
Warner Bros. Discovery	$39.32 billion	1.72	-$11.31 billion	$0.19	143.95

Gray Media has higher earnings, but lower revenue than Warner Bros. Discovery. Gray Media 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.

Analyst Ratings

This is a summary of current ratings and price targets for Gray Media and Warner Bros. Discovery, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gray Media	1	1	3	1	2.67
Warner Bros. Discovery	1	11	11	1	2.50

Gray Media presently has a consensus price target of $7.25, indicating a potential upside of 66.28%. Warner Bros. Discovery has a consensus price target of $24.94, indicating a potential downside of 8.82%. Given Gray Media’s stronger consensus rating and higher probable upside, analysts plainly believe Gray Media is more favorable than Warner Bros. Discovery.

Summary

Gray Media beats Warner Bros. Discovery on 9 of the 14 factors compared between the two stocks.

About Gray Media

Gray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States. It also broadcasts secondary digital channels affiliated to ABC, CBS, NBC, and FOX, as well as various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, Circle, Telemundo, THE365, and Outlaw; and local news/weather channels in various markets. It owns and operates television stations and digital assets that serve television markets in the United States. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.

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.