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Not even the “Happiest Place on Earth” can be expected to keep investors happy forever.

Wall Street has been extremely forgiving of Disney’s pandemic-induced woes over the past year due to the strength of Disney Plus. For the past couple of quarters, Disney stock rose more than 5% following its earnings reports thanks to the streaming platform, which soared to 86.8 million subscribers in just a little over a year (as of Dec. 2).

The stock is on a monster run: Disney shares hit fresh all-time highs Wednesday and have surged a whopping 32% over the past year alone compared with the broader market’s 16% gain during the same time period.

But with Disney reporting fiscal Q1 results after market close Thursday, a question looms: How much more time will investors give the company before they start to remember that its profit-driving segments matter?

Two of Disney’s core businesses have been significantly weighed down by the pandemic: Studio Entertainment and Parks, Experiences and Products, which accounted for 22% and 23% of FY 2020 revenue, respectively. Somewhat fortunately for Disney, its Media Networks business, which accounted for roughly 40% of total revenue, held up relatively well during the year. Revenue increased 14% in FY 2020, to $28.4 billion.

Investors are forward looking in nature, and thus Disney investors have been richly rewarding the company as it eyes the future of media. However, we could see their faith get tested beginning in Q1 as the streaming subscriber growth accelerated by the pandemic starts to cool off, setting up tough comparisons to Disney Plus’ white-hot 2020.

Disney’s investor day in December did a great job at selling how well stocked the programming pantry is for Disney Plus. But that content is not going to be cheap, and the service is still a long way away from profitability.

Disney CFO Christine McCarthy said the company would be spending $8 billion to $9 billion on content, and peak operating losses are expected at the end of fiscal 2021. She also mentioned that the service probably won’t reach profitability until 2024.

Theme-Park Woes

Prior to the pandemic, Disney’s theme-parks business was its bread and butter, but investors are going to have to get real and see the damage done to this business has no end in sight.

Disney’s California theme parks — Disneyland and California Adventure — have remained closed since the onset of the pandemic in March. Disneyland Paris reopened July 15 but was forced to close again at the end of October, with plans to finally reopen again April 2.

Disneyland Hong Kong reopened June 18, and after rounds of reopening and closing, the park is closed indefinitely following its third closure. Meanwhile Disney’s other parks in Orlando, Tokyo and Shanghai are running with limited capacity and restricted operations.

In some good news for Disneyland and California Adventure, Disney said Monday it will be bringing back 1,000 employees in mid March for what the company calls a “limited ticketed experience.”

The impact of theme-parks closures can’t be understated. In the holiday quarter of 2019, Disney reported revenue in its Parks, Experiences and Products segment of $7.4 billion. That compares with just $2.6 billion in Q4. Segment revenue sank 61%, resulting in a $2.4 billion hit to operating income during its fiscal Q4. For the full year, Disney took a $6.9 billion blow to operating income in the segment.

Disney’s management is frustrated. During the company’s Q4 earnings call, CEO Bob Chapek couldn’t help but take a jab at California lawmakers for keeping Disneyland’s doors shut.

Chapek has had to pull out all the stops to mitigate as much damage as possible. To cut costs, Disney announced layoffs and furloughs throughout 2020, which affected many of its divisions. The company currently has plans to lay off 32,000 employees within its Parks, Experiences and Products segment in the first half of this year.

Disney investors have had to pay the price as well. The company pushed pause on its semi-annual dividend payment last month as a result of “limited visibility” due to COVID and its decision to prioritize investment in DTC initiatives.

Things are getting so dire lawmakers are pushing for the reopening of large theme parks including Disneyland. California Assembly member Sharon Quirk-Silva announced last week she would be co-sponsoring a bill requiring the reopening of all the state’s theme parks.

While the vaccine rollout is well underway, a full return to operations for Disney parks is still at least a year off. Even if most of the world’s population is vaccinated by mid-to-late 2021, it could be difficult for Disney parks to see pre-COVID-like revenue until 2022 at the earliest.

There’s been a lot of speculation about high levels of pent-up demand for travel and entertainment once there is mass distribution of the COVID vaccine. However, survey results published in VIP’s December special report, “Riding the Third Wave: COVID-19’s Impact on Media , found American adults still were not very comfortable with going to theme parks just yet.

Those numbers may have shifted slightly now that the vaccine is being rolled out, but the challenge will be to reach pre-pandemic business levels. And that’s going to take time.

It’s undeniable that Disney shares have been on meteoric rise over the past year on Disney Plus’ momentum, but they could start falling back down to Earth in 2021. Since the last investor day on Dec. 10, Disney soared a staggering 21%, and while we’re probably not going to see the stock nosedive, at some point Disney’s rocket ride could begin to lose altitude.

Shares could eventually fall back toward the $150-per-share range if meaningful recovery in its theme parks and studio entertainment businesses doesn’t come soon.

Management will have to do an exceptional job with the narrative it paints on the Q1 earnings call, or the forces of gravity will start to take hold on its stock

Variety's Heidi Chung contributed to this post.

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