Walt Disney Co (NYSE:DIS) stock looks like one of the more interesting in the market at the moment. Walt Disney stock has moved mostly sideways over the past two years, as investors continue to debate the company’s place in the quickly changing media space.

The recent weakness leaves DIS stock in an interesting spot. DIS stock looks cheap, trading at just 18x fiscal 2017 (ending Sept. 30) EPS.

Growth did stall last year (EPS actually declined modestly) but Disney has a number of options to jumpstart its growth.

The company has walked away from providing content to Netflix, Inc. (NASDAQ:NFLX), in favor of creating its own streaming service. It reportedly was in talks to buy assets from Twenty-First Century Fox Inc (NASDAQ:FOX,FOXA).

There are challenges though, too. Woes at ESPN create a significant risk to Walt Disney stock. In fact, there are concerns across Disney’s portfolio, with one notable exception. And the performance of many of Walt Disney Co peers shows how significant the challenges are in the company’s key end markets.

That performance also shows that, even down ~11% from April highs, the market still is pricing DIS stock as if it will manage those difficult end markets better than its rivals. The extent to which an investor believes that is the case likely determines how that investor feels about Walt Disney stock at current levels.

Tough Markets for Walt Disney Co

Fiscal 2017 results show how difficult end markets are for Disney at the moment. Three of the company’s four operating segments saw revenue decline for the full year; all three saw operating profit decline year-over-year.

And yet, Walt Disney stock actually has gained 4.5% over the past year. Looking at peers in those challenged segments, it could be much worse.

The Media Networks business still generates 47% of segment-level profit despite an 11% decline this year. The Broadcasting business (ie, ABC) actually increased profit 1%, but cable network profit dropped 10%.

Disney isn’t alone in seeing pressure in its cable businesses. AMC Networks Inc (NASDAQ:AMCX) stock has dropped 7% over the past 12 months. Discovery Communications Inc. (NASDAQ:DISCA) is off 34%. MSG Networks Inc (NYSE:MSGN), a sports pure-play like ESPN, is down 18%.

The news is similar in the other challenged businesses. Studio Entertainment profit fell 13% in FY17. And while there aren’t any publicly traded standalone studios, other owners like Viacom, Inc. (NASDAQ:VIA,VIAB) and Fox have struggled as well.

VIAB stock has dropped 26% in the past year. Fox shares were down double-digits before rallying amid buyout rumors. Stocks of movie theater operators have been hammered this year as well, though in part due to fears about higher royalties paid to companies like Disney.

Those two segments combined generate about 63% of Disney profit. And investors have fled those sectors over the past year-plus. In that context, the fact that DIS is positive over the last year, and down just ~15% from 2015 peaks, shows that investors still are willing to give Disney the benefit of the doubt.

Is Walt Disney Stock Worth the Risk?

So the question is whether Disney really is different enough to manage challenges like cord-cutting, weakness in its license business and lower revenue from the studio business. On that front, I remain rather skeptical.

Again, three of the four segments, accounting for nearly three-quarters of profit, are in decline. Disney’s streaming ambitions probably help on that front. But this is a $175 billion company, including debt.

Netflix is worth barely half that. Even assuming Disney’s content ambitions bear fruit, it alone doesn’t support that much in the way of upside from current levels, particularly with likely declines at ESPN offsetting some of that contribution.

And it’s worth considering what valuations are elsewhere in the sector. AMCX and MSGN trade at single-digit EPS and EBITDA multiples. So does Viacom. Fox stock trades at 13x forward EPS, even after the M&A-driven gains of late.

The problem is simple for DIS stock: most of the company’s profits are coming from areas that appear likely to be facing a long-term decline. Even assuming Disney can outperform smaller rivals with less-compelling brands, that doesn’t assure that Disney’s own profits will rise over that period.

Yet investors still are treating Walt Disney stock as if that will be the case. It’s possible; but it’s not guaranteed, or even likely in my opinion. And if that is not the case, and Disney isn’t quite as nimble as investors hope, the downside here could be substantial.

Vince Martin is long shares of AMC Networks, and has no positions in any other securities mentioned.