Warner Bros. Discovery (WBD) stock price has been one of the worst-performing stocks in Wall Street this year as the company has faced substantial internal and external challenges. It has dropped by 30% this year while the stock market has risen by double digits.  Challenges remainWarner Bros. Discovery and other media-related companies are not doing well this year. As I wrote recently, AMC Networks stock price has dropped by over 40% this year. Similarly, Paramount Global agreed to merge with Skydance in July. While the deal was good for Shari Redstone, it was a big discount compared to what it was worth when Paramount and Viacom merged. Other media companies like Nextar Media and SiriusXM are not doing well.Warner Bros. Discovery is facing numerous challenges. The two most important ones are that the advertising industry is slowing and analysts don’t expect it to recover in the near term.At the same time, the company holds some assets that investors see as toxic. These ones include assets like CNN, OWN, HGTV, and Food Network. While these were the most popular brands a few years ago, they are slowly losing their relevance. For example, CNN averages less than 1.5 million viewers per day in the key demo. The company’s growing segment of direct-to-consumer (DTC) is also going through a slowdown. In the most recent financial results, the company said that its DTC business had 99.6 million subscribers and generated $2.46 billion in revenues.This division could come under pressure now that the company has lost the coveted NBA rights to Amazon. As a result, many people who subscribe to its premium sports product because of NBA could decamp to Amazon. In a recent note, analysts at Macquarie said:“NBA rights were important… to the future success of the Max streaming service; the loss may hasten the downturn in linear networks too… Losing these key rights means it now loses a core content asset for both its linear networks and its Max streaming service… Ad revenues will now drop sharply starting in Q425, and bargaining leverage on cable affiliate renewals now falls.” Other key segments are slowingRecent financial results showed that the company’s business was slowing. Its networks revenue fell by 8% to $5.12 billion. This slowdown happened as the distribution and advertisement revenue fell by 6% and 11%, respectively. Distribution revenue is the one the company makes from cable companies. As a result, with people cutting their cords, this revenue will likely continue to slow down in the coming years. While the ad business may stabilize, there is little chance that it will go back to growth.The Studios segment also saw its revenue drop by 13% in the first quarter to $2.82 billion. This segment has room to grow this year as the industry emerges from the strikes. Separating these businessesIn an article released earlier this year, I noted that the company’s sum of parts valuation showed that it was significantly undervalued. Now, there are rumours that the management plans to separate the slow-growing businesses with the futuristic ones – like studio and DTC. In theory, such a process would leave Warner Bros. Discovery as a leaner company with a higher valuation. A good example is its direct-to-consumer business, which has almost 100 million subscribers. Excluding debt, it is easy to establish its valuation since it uses a similar model to Netflix, which has 277 million users. The two divisions made $2.46 billion and $9.3 billion in the first quarter. This means that Warner made $24.6 per user while Netflix made $33.5. Netflix has a valuation of $256 billion, meaning that Warner’s DTC segment would be valued at about $92.4 billion. Of course, there are other things to consider but either way, it would be higher than the current combined $19 billion.  WBD earnings aheadThe next important catalyst for the WBD stock price is its earnings, which will come out on Wednesday. Analysts expect that the company’s revenue will be $10 billion, down from $10.44 billion in the same quarter a year earlier. For the year, analysts believe that the revenue will be over $40.7 billion, down by 1.3% from last year. Warner Bros. Discovery stock price analysisThe weekly chart shows that the WBD share price has been in a tight range in the past few weeks. It has remained below the 50-week moving average, meaning that bears are in control. More By This Author:AUD/USD Analysis Amid Fed And RBA Divergence On Rates Did Apple’s Slow AI Progress Prompt Buffett To Sell? Market crash: Nvidia stock falls amid tech pullback