Walt Disney Company (The) (DIS) vs NIKE, Inc. (NKE): Which Is the Better Buy in 2026?
As of 2026-08-03, DIS is undervalued at $96, with a DCF intrinsic value of $254584003147 and a margin of safety of 100%. NKE is undervalued at $42, with an intrinsic value of $164 and a margin of safety of 74%. Of the two, DIS has the wider margin of safety.
Rewards
- ★Free cash flow has grown at a 111.4% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★Each dollar of retained earnings has created $6.06 of earning power — management is an exceptional capital allocator.
- ★Management has timed buybacks well — 2 out of 2 years showed value-accretive repurchases.
- ★NIKE, Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★NIKE, Inc. scores 71/100 on the Economic Moat Score (Wide Moat), with roic consistency as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
Risks
- ⚠PEG ratio of 2.24 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Altman Z-Score of 1.08 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Free cash flow has declined at a 23.5% CAGR over the past 4 years — a concerning trend.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $96?
The market implies -18.7% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding -15.2%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $42?
The market implies +7.6% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +14.8%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with revenue predictability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Wide moat with strength across all dimensions. ROIC Consistency is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pessimistic — investigate whether fears are temporary or structural"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: DIS vs NKE
Is Walt Disney Company (The) or NIKE, Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, DIS trades at a 100.0% margin of safety (intrinsic value $254584003147 vs. price $96), compared to NKE's 74.5% margin of safety (intrinsic $164 vs. $42).
Which stock has a wider economic moat, Walt Disney Company (The) or NIKE, Inc.?▼
NKE scores 71/100 (Wide moat), while DIS scores 51/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Walt Disney Company (The) in financial distress?▼
DIS's Altman Z-Score of 1.1 places it in the Distress zone, signaling elevated bankruptcy risk. NKE scores 3.5 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Walt Disney Company (The) or NIKE, Inc.?▼
NIKE, Inc. (NKE) generates a 3.1% free cash flow yield, compared to Walt Disney Company (The)'s 0.0%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Walt Disney Company (The) or NIKE, Inc.?▼
NKE earns 17.9% ROIC versus DIS's 7.3%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Walt Disney Company (The)'s or NIKE, Inc.'s?▼
DIS's dividend earns a safety score of 88/100 (Very Safe), compared to NKE's 34/100 (Unsafe). DIS has raised its dividend for 1 consecutive years.