Walt Disney (NYSE:DIS) stock looks like a long-term defensive play to a lot of smart people.

Tech whisperer Cathie Wood loaded up on the shares in September. Of 20 analysts following the stock at Tipranks, 17 are telling investors to buy it.

This has not helped the shares.

Since the start of 2021 DIS stock is down 4%, while the S&P average is up nearly 17%. Can all this smart money be wrong?

DIS Stock Long Term vs. Short Term

Over the long run, stock in Walt Disney is one of the happiest places on Earth.

The shares are up 90% over the last five years while building the most enviable collection of entertainment assets ever assembled. Star Wars, Marvel, the Simpsons, and more were brought under the Disney banner by former CEO Bob Iger. Successor Bob Chapek, who came from the enormous parks and resorts sector, is now managing it.

His chief job is selling the Disney Bundle, a collection of streaming assets costing $20/month. The customer relationship is further monetized at a global network of parks, resorts and cruise ships.

There are only two problems. Despite all Disney’s efforts, it’s still third in streaming. It has 116 million customers on Disney+, 174 million streaming accounts in all. But that still trails Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) Prime.

To get here Disney has been discounting its prices. Chapek said on his August conference call that Disney brought in $4.3 billion in “direct to consumer” revenue during the quarter. But that amounts to less than $25 per customer.

Then there are the theme parks, which in a normal year should represent 40% of revenue. That’s down to 25%.  Parks are open, but visitors are coming back slowly. Management and analysts are both convinced that they have seen the bottom and better days are ahead.

The Bear Case

Disney got into streaming because what it now calls “linear networks,” broadcast and cable, were losing altitude. They still are. Operating income from the networks was down more than $1 billion year-over-year in the third quarter. ABC network revenues were down, and costs for sports production were up, without a corresponding increase in revenue.

Then there is growing international tension. This has not just cut travel. It has also reduced the attractiveness of Disney’s American culture to international audiences. Management hoped that multicultural titles like Raya and the Last Dragon and Soul would be huge. They weren’t.

If DIS stock fully reflected Disney problems, you could argue it’s a bargain. But the assumption of Disney strength has kept the stock price high. With a market cap of $315 billion Disney is now selling for nearly 6 times its revenue, and 284 times its earnings. The pandemic’s end, profits from streaming, and the return to normal are all built into today’s stock price.

The Bottom Line

Disney has become a defensive play against a frightening future.

Investors are buying Disney’s assumptions of huge future profits in streaming and tourism. They’re ignoring today’s losses in streaming and the continued fall in linear networks. They’re assuming that Chapek and his team can do no wrong, that fat profits are just around the corner.

They may be right. Disney has invested heavily in its turn to streaming and there are customers. There are also $51 billion in borrowings, the product of the Fox media purchase. Disney hasn’t paid a dividend since before the pandemic.

Disney next reports earnings Nov. 12. Net income of just 52 cents/share is expected, on revenue of $19 billion. How long will investors wait for their promised happy ending?

On the date of publication, Dana Blankenhorn owned a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.