ATVI  Activision Blizzard Inc

Exchange

NASDAQ

Sector

Technology

Industry

Computer Software: Prepackaged Software

Market Cap.

33.73B

Vuru Grade

71.82/100

Current Price

$45.33
-0.06 (-0.13%)

Growth Price

$27.97
Overvalued by 38.30%

Stability Price

$11.21
Overvalued by 75.27%

Company Metrics

  • P/E 35.41
  • P/S 5.11
  • P/B 3.7
  • EPS 1.28
  • Cash ROIC 14.62%
  • Cash Ratio 0.70
  • Dividend 0.26 / 0.57%
  • Avg. Vol. 9.16M
  • Shares 744.10M
  • Market Cap. 33.73B

Company Description

Activision Blizzard, Inc., through its subsidiaries, publishes online, personal computer (PC), console, and handheld games worldwide. The company develops and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. It publishes interactive software products and peripherals. Its products cover various game categories, such as action/adventure, action... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

3 Ways Activision Blizzard Inc. Could Stumble in 2017
Madison.com - 37 minutes ago
When Activision bought the mobile game giant King Digital last year, its big hope was to find a way to better monetize its massive base of active users.
The Activision Blizzard, Inc (ATVI) Stake Held by the First Manhattan Co. - DailyQuint
Cipher Capital LP Buys Shares of 37234 Activision Blizzard, Inc (ATVI) - Sports Perspectives
Activision Blizzard Inc. Has Big Plans for Consumer Products
Motley Fool - Feb 13, 2017
Activision Blizzard (NASDAQ:ATVI) recently announced it was creating a consumer products division, and it has hired Tim Kilpin, a former executive of Mattel and Walt Disney, to run it.
Analyst Activity – Oppenheimer Holdings, Inc. Reiterates Outperform on ... - Market Exclusive
Activision Blizzard Just Got A New Bear: Hilliard Lyons' Jeff Thomison - Benzinga
What to Watch When Activision Blizzard Inc. Reports Earnings
Motley Fool - Feb 5, 2017
Activision Blizzard (NASDAQ:ATVI) is set to post earnings results for the key holiday sales period on Thursday, Feb. 9. The stock is trouncing the market over the last five years, but investors have pushed it lower since its last quarterly check-in ...
Will Activision Blizzard, Inc.'s Strong Earnings Streak Continue?
Motley Fool - Feb 3, 2017
Activision Blizzard, Inc. (NASDAQ:ATVI) is scheduled to report on its fourth quarter after the market closes on Thursday, Feb. 9, and investors are hoping the company's strong earnings momentum continues.
Activision Blizzard Further Accelerates Global Growth Strategy with Launch of ... - Yahoo Finance
Gaming company Activision Blizzard taps former Disney, Mattel exec as CEO of ... - MarketWatch
Activision Blizzard: It's Not About The Buyback
Seeking Alpha - Feb 10, 2017
After Activision Blizzard (NASDAQ:ATVI) shares surged about 17% following its earnings report (see below), headlines suggested that the announcement of a $1 billion share buyback and 15% dividend increase were behind the jump.
Why Shares of Activision Blizzard, Inc. Popped 20% on Friday - Fox Business
40% Forward Returns: Activision Blizzard Does More Than Entertain
Seeking Alpha - Feb 3, 2017
Activision currently holds four of the top 10 titles on current-gen consoles, including the entrenched Call of Duty and Skylanders franchises.
Monday's Vital Data: Nvidia Corporation (NVDA), Twitter Inc (TWTR) and ...
Investorplace.com - Feb 13, 2017
U.S. stock futures are trending higher this morning, as Wall Street looks toward softening trade rhetoric from the White House on Japan and China.
Earnings Reaction History: Activision Blizzard, Inc., 60.0% Follow-Through ...
Nasdaq - Feb 9, 2017
Activision Blizzard, Inc. ( ATVI ) is due to issue its quarterly earnings report in the upcoming extended-hours session.
Activision Blizzard Announces New Call of Duty In-Game Purchase to Support ...
Business Wire (press release) - Feb 16, 2017
BUSINESS WIRE)--Activision Blizzard (Nasdaq: ATVI) today announced an expansion of its in-game program that supports the Call of Duty™ Endowment's nationwide effort to help veterans find high-quality careers.
Can The Uptrend Continue for Activision Blizzard (ATVI)? February 17, 2017 - Zacks.com
Why to Keeping Eye on Visa Inc. (V), Activision Blizzard, Inc. (ATVI)? - StockNewsJournal
'Record' results can't stop job losses at Activision Blizzard
Proactive Investors USA & Canada - Feb 13, 2017
When your company boasts about “record” financial results, most workers would think a bonus is just around the corner, not job cuts.
Activision Blizzard Earnings: What to expect - MarketWatch
How Activision Blizzard Made $2B Off Their Gaming Franchises - Tech.Co
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for ATVI to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate ATVI's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$45.33 Current Price

$27.97 Growth Price (DCF)

Overvalued by 38.30%


Growth Rate Assumed by Market: 31.63%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$11.21 Stability Price (EPV)

Overvalued by 75.27%


Discount Rate: 15.0%

$32.08 Book Price

Overvalued by 29.22%


Satisfactory Cash Return on Invested Capital over the past 5 years

ATVI has somewhat efficiently invested its financial resources in buildings, projects, and equipment. If CROIC is inconsistent, it's likely ATVI could be benefiting from a one-time event or has a mixed history of investing capital productively. Read the company's Annual Report to determine whether this can improve.

ATVI has created $14.62 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 880.00M 1.27B 1.19B 1.19B 1.08B
divided by
Invested Capital 7.20B 7.17B 7.16B 7.17B 10.81B
Cash ROIC 12.23% 17.73% 16.61% 16.52% 10.00%

Satisfactory Return on Equity over the past 5 years

ATVI has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

ATVI has generated $11.67 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 1.09B 1.15B 1.01B 835.00M 892.00M
divided by
Stockholders' Equity 10.49B 11.32B 6.62B 7.23B 8.07B
Return on Equity 10.34% 10.15% 15.25% 11.54% 11.06%

Excellent Business Performance over the past 10 years

ATVI has been able to maintain profitability in good times and bad. This could mean ATVI has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

ATVI has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 55.60M 9.23M 544.10M 1.11B 1.28B 880.00M 1.27B 1.19B 1.19B 1.08B

Good Balance Sheet

ATVI's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 944.96M 954.85M 1.45B 3.25B 3.51B 3.53B 4.38B 4.44B 4.86B 1.83B
Current Assets 1.12B 1.40B 1.98B 5.33B 5.39B 5.38B 6.27B 6.24B 6.91B 3.39B
Total Assets 1.42B 1.79B 2.53B 13.74B 13.41B 13.28B 14.20B 14.01B 14.75B 15.25B
Current Liabilities 192.16M 341.17M 556.07M 2.51B 2.91B 2.56B 2.65B 2.41B 2.71B 2.61B
Total Liabilities 193.94M 382.42M 582.78M 2.99B 3.20B 2.79B 2.88B 7.39B 7.51B 7.18B
Stockholder' Equity 1.23B 1.41B 1.95B 10.76B 10.20B 10.49B 11.32B 6.62B 7.23B 8.07B
Current Ratio 5.81 4.11 3.56 2.13 1.85 2.10 2.37 2.60 2.55 1.30
TL-to-TA 0.14 0.21 0.23 0.22 0.24 0.21 0.20 0.53 0.51 0.47

Consistent Reinvestment of Profits over the past 10 years

ATVI has consistently retained profits. This may put ATVI in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, ATVI can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 388.51M 427.78M 772.66M -361.00M 57.00M 948.00M 1.89B 2.69B 3.37B 4.10B
Retained Earnings Growth - 10.11% 80.62% -146.72% 115.79% 1,563.16% 99.68% 41.89% 25.61% 21.40%

Growing Competitive Advantage over the past 10 years

ATVI has a growing competitive advantage. This could be due to strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will continue to strengthen.

$13.91 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 41.90M 85.79M 344.88M 113.00M 418.00M 1.09B 1.15B 1.01B 835.00M 892.00M
divided by
Revenue 1.47B 1.51B 2.90B 4.28B 4.45B 4.76B 4.86B 4.58B 4.41B 4.66B
Net Profit Margin 2.85% 5.67% 11.90% 2.64% 9.40% 22.82% 23.66% 22.04% 18.94% 19.13%

Strong Pricing Power over the past 10 years

ATVI has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$56.30 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 527.64M 534.95M 1.25B 1.97B 2.32B 4.11B 3.19B 3.05B 2.88B 3.08B
divided by
Revenue 1.47B 1.51B 2.90B 4.28B 4.45B 4.76B 4.86B 4.58B 4.41B 4.66B
Gross Margin 35.94% 35.36% 43.22% 46.09% 52.19% 86.41% 65.77% 66.59% 65.40% 66.02%

Low Capital Intensity over the past 10 years

ATVI has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that ATVI may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

23.18% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 30.41M 17.94M 29.40M 69.00M 97.00M 72.00M 73.00M 74.00M 107.00M 111.00M
divided by
Net Income 41.90M 85.79M 344.88M 113.00M 418.00M 1.09B 1.15B 1.01B 835.00M 892.00M
Capital Expenditure Ratio 72.57% 20.91% 8.52% 61.06% 23.21% 6.64% 6.35% 7.33% 12.81% 12.44%

No Dividend History over the past 10 years

ATVI has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 598.87M 610.68M 629.46M 1.31B 1.24B 1.16B 1.12B 1.04B 726.00M 739.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 8.38 14.22 8.30 11.07 12.38 12.32 10.56 17.80 20.24 39.43
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

ATVI has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 598.87M 610.68M 629.46M 1.31B 1.24B 1.16B 1.12B 1.04B 726.00M 739.00M
Stock Bought Back - -1.93% -2.98% -51.99% 6.07% 6.92% 3.40% 8.02% 42.56% -1.76%
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