Key Fundamental Metrics for PSKY Stock
- 52-Week Range: $8.62 to $20.86
- Current Stock Price: $10.62
- Street Consensus Target Price: ~$13
- LTM Revenue: $28.9B
- LTM EBITDA Margin: ~16%
- Forward P/E: ~14x
- Mid-Case 10-Year Forward Stock Price Target: ~$17
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The Merger Is the Story, But the Business Underneath Has Been Quietly Improving
Paramount Skydance (PSKY) is trading near the bottom of its 52-week range while simultaneously executing one of the largest media mergers in history. The market is focused on deal risk and regulatory uncertainty. But the core business has been improving in ways that deserve more attention.
In February 2026, Paramount announced a definitive agreement to acquire Warner Bros. Discovery for $31 per share in cash, valuing the combined enterprise at roughly $110 billion, including debt. WBD shareholders approved the deal in April, and bondholders signed off in late May. The transaction is now targeting a Q3 2026 close.
The primary overhang is regulatory. Nearly half the equity backing the deal comes from Gulf sovereign wealth funds, including Saudi Arabia’s PIF, Abu Dhabi’s L’imad Holding, and Qatar’s QIA. Broadcast license rules typically cap foreign ownership at 25%, so Paramount has filed an FCC petition seeking a waiver. That review is the single biggest variable that investors cannot model with confidence.
At around $10, PSKY trades at roughly 0.4x trailing revenue and an EV/EBITDA of around 13x. For a company generating nearly $29 billion in annual revenue, that is an undemanding multiple.
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A Business in Transition, With Streaming Finally Pulling Its Weight
Paramount’s top line has been relatively flat over the past four years, hovering between $28 and $30 billion. That flatness masks a significant internal shift. TV Media has been declining steadily while Direct-to-Consumer, anchored by Paramount+, has moved in the opposite direction.
Q1 2026 results made that transition concrete, as total revenue came in at $7.35 billion, up 2% year over year, beating the Street’s estimate of around $7.3 billion. Adjusted EBITDA reached $1.2 billion, up roughly 60% year over year, with EBITDA margin expanding to 16% from 10% in Q1 2025.
Paramount+ revenue grew 17% in the quarter, driven by a January price increase and a deliberate exit of low-value international subscribers. The platform added around 700,000 net subscribers, bringing its global base to roughly 79.6 million.
CEO David Ellison noted on the earnings call that the company has nearly doubled its 2026 film slate compared with 2025, since the Skydance merger closed last August. Studio’s revenue grew 11% in Q1 to $1.3 billion, and the segment is beginning to look like a reliable contributor.
TV Media remains the structural pressure point. That segment posted a 6% revenue decline in Q1 to $3.67 billion. CBS remains a strong asset around live sports and news, but the cable bundle is shrinking, and linear advertising continues to soften.
Management reaffirmed full-year guidance of $30 billion in revenue and $3.8 billion in adjusted EBITDA for 2026, and confirmed that more than $2.5 billion of the $3 billion Skydance integration savings are on track to be eliminated by year’s end.
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What the WBD Deal Adds, and What It Complicates
The segment data show what Paramount brings to this merger: DTC grew from $3.3 billion in 2021 to $7.6 billion in 2024, while TV Media declined from $22.6 billion to $18.8 billion over the same period. The business has been steadily reweighting itself toward streaming even before the WBD transaction.
Adding Warner Bros. Discovery brings HBO Max, CNN, the Warner Bros. studio, and a content library spanning Harry Potter, DC Comics, and Mission: Impossible. The combination creates a streaming platform with real scale to compete against Netflix and Disney+.
On a fully synergized basis, Paramount values WBD at 7.5x 2026 EBITDA. At close, the company expects net debt-to-EBITDA of around 4.3x, with a stated path to investment-grade credit metrics within three years.
That leverage number demands scrutiny. Deleveraging from 4.3x requires consistent free cash flow, disciplined content spending, and a streaming strategy that retains subscribers without overspending on programming. All three are achievable, but none are guaranteed in an environment where competition is intensifying.
The FCC review is the most consequential near-term gating item. A ticking fee of $0.25 per share per quarter kicks in for WBD shareholders if the deal slips past September 30, which keeps both sides motivated to move efficiently.
What Does the Valuation Model Say?
TIKR’s valuation model targets around $14 for PSKY on mid-case assumptions, implying a total return of around 32% from the current price, or roughly 6% annualized through the end of 2030.
The model assumes revenue growth of around 2.5% per year, with net income margins expanding gradually to around 4%. EPS is projected to grow at roughly 10% annually as the multiple stabilizes and earnings recover from deal accounting and restructuring charges.
Under the high case, the model reaches around $20 per share, implying a total return of around 85%. The low case points to around $13. The wide range reflects genuine uncertainty around execution, integration, and the pace of deleveraging.
If the WBD deal closes cleanly and synergies materialize on schedule, the high case becomes reachable. If regulatory friction delays the close or integration costs run higher than expected, the low case is the more relevant benchmark.
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Is PSKY Worth Buying at Today’s Levels?
At around $10, PSKY trades at a meaningful discount to both the consensus target of around $13 and the TIKR mid-case target of $14. The stock is near the low end of its 52-week range, streaming margins are expanding, and cost discipline is showing up in the numbers.
The honest framing is that PSKY is not primarily a bet on the core business. It is a bet that the WBD merger will close, integrate smoothly, and generate synergies that justify both the price tag and the accompanying leverage.
For investors who believe the deal closes on schedule, the current price offers a patient entry point with reasonable upside. For those who need more clarity, the Q3 close target is not far away, and waiting for regulatory confirmation would not mean missing the bulk of the opportunity the model suggests is available.
The valuation is not demanding. The business is improving. The merger is the variable that determines how this plays out.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
