Coming into Wednesday trading, Disney (US: DIS) stock is showing a bit of strength after last week’s flat performance that did little to stem the more than 21% decline over the past six months.

Looking at DIS stock’s scores on Fintel’s Quality, Value and Momentum quant dashboards, the outlook is clouded, exacerbated by the many strategic problems that beset the company that appears to generally be in a state of disarray.

Yet there are bullish signs, as the put/call ratios on Disney shares signal that options traders are upbeat about the firm's outlook as CEO Bob Iger gets his old gang back together to right the ship or sell off parts.

Quant Scores Don’t Compare

There’s no way to paint positive the quant scores that Disney stock garners on Fintel’s dashboards.

The Quality score is a proprietary scoring model that identifies high quality companies, based on cash generating efficiencies. DIS stock currently scores 49.37. By comparison, two of its entertainment rivals, Netflix (US:NFLX) and Warner Bros. Discovery (US:WBD) score higher, at 57.16 and  53.0, respectively.

On the Value metric, which ranks companies based on their relative valuation, from 0 to 100, with 100 being the most undervalued, Disney gets a 52.5. That’s near even with NFLX stock, at 53.8.

Finally, on Momentum, the score that ranks companies on their six-month momentum, Disney scores 37.59, while Netflix stock is a whopping 84.09.

Summer of Disappointments

With overall U.S. box office revenue still below 2019 levels, no fewer than four of Disney's movies have been regarded as flops. The films in the latter category were Ant-Man and the Wasp: Quantumania, The Little Mermaid, Elemental, and, perhaps most surprisingly of all, Indiana Jones.

Meanwhile, its main streaming channel, Disney+, remains unprofitable this year and may just break even in 2024. Further, according to Keybanc, which downgraded DIS stock to ‘sector weight’ from ‘overweight’ on July 1, the subscriber growth of the channel has been weaker than expected. 

And while the company's cable networks were once a huge growth engine for DIS stock, that's no longer the case, as the cord-cutting phenomenon continues to undermine their profitability. In the company's fiscal second quarter, which ended in April,  for example, the operating income of its Linear Networks tumbled a dismal 35% versus the same period a year earlier to $1.83 billion. 

Finally, even the attendance at the conglomerate's theme parks has come in below expectations, as the company’s control of the Florida governing district that’s home to Walt Disney World has been usurped by presidential hopeful Gov. Ron DeSantis.

Cue the Lay-offs

The firm has laid off about 7,000 of its employees or roughly 8% of its total workforce this year, adding more to the negative outlook and shaking the company's stability. 

And Disney has talked about selling a number of its traditional TV networks, while it's also (incredibly, in my view) planning to turn its crown jewel, sports cable network ESPN, into a streaming-only service. At least in the short-to-medium-term, the latter move could significantly undermine the company's financial results.

That's because, instead of ESPN  generating a relatively hefty monthly fee from nearly every cable subscriber in the country, as is the case now, after the transformation, the channel would only obtain revenue from consumers who choose to subscribe to the sports channel. 

Bullish Option Data

But it’s not all bad news. The stock's overall put/call ratio is a bullish 0.64. And on July 28, the number of call options on DIS stock outstanding came in at 985,099, the highest level in a week and the second-highest number since at least June 23.

In fact, as contributor Bret Kenwell noted earlier this week, DIS stock clocked in at Number 1 on Fintel’s Options Flow Leaderboard even as the shares were at 52-week lows.