Skydance Trades at a Fraction of Netflix's Valuation. Is the Discount Deserved?

After acquiring Warner Bros. Discovery, Skydance trades at roughly one-eighth Netflix's valuation. However, the discount appears justified given Skydance's $78.9 billion net debt (more than double its market cap), single-digit operating margins, and shrinking cable networks, compared to Netflix's clean balance sheet, powerful cash generation, and 33.4% operating margins.