ATVI  Activision Blizzard Inc

Exchange

NASDAQ

Sector

Technology

Industry

Computer Software: Prepackaged Software

Market Cap.

46.81B

Vuru Grade

72.81/100

Current Price

$62.01
+0.64 (+1.04%)

Growth Price

$41.86
Overvalued by 32.49%

Stability Price

$14.96
Overvalued by 75.87%

Company Metrics

  • P/E 41.87
  • P/S 6.68
  • P/B 4.77
  • EPS 1.48
  • Cash ROIC 15.67%
  • Cash Ratio 1.22
  • Dividend 0.3 / 0.49%
  • Avg. Vol. 6.66M
  • Shares 754.88M
  • Market Cap. 46.81B

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

Activision Blizzard: The Raw Numbers
Motley Fool - Aug 4, 2017
On the esports side, Activision Blizzard sold the first seven teams for Overwatch League. Owners like Robert Kraft (New England Patriots) and Stan Kroenke (LA Rams) give a level of stability and legitimacy to the league.
Activision Blizzard Earnings: What to Watch - MarketWatch
Activision Blizzard posts record first-half revenues - Seeking Alpha
Expectations Are High For Activision Blizzard, Inc.'s Earnings Report
Motley Fool - Jul 31, 2017
Activision Blizzard, Inc. (NASDAQ:ATVI) has been on a roll financially for nearly two years, driven largely by hit games and growth in the digital gaming market.
Activision Blizzard, Inc. (NASDAQ:ATVI) has analysts on the Bullish side this ... - WeeklyHub
Activision Blizzard's (ATVI) Overweight Rating Reiterated at Morgan Stanley - AppsforPCdaily
Activision Blizzard: Strong Free Cash Flow Indicates 33% Upside
Seeking Alpha - Aug 9, 2017
ATVI's P/E of 44 is largely exaggerated by depreciation and amortization expenses, non-cash items that exceeded net income in FY 2016.
Activision (ATVI) Upgraded to Strong Buy on Impressive Q2 - Yahoo Finance
Monitor the Current Moves of: Activision Blizzard, Inc. (ATVI) - Hot Stocks Point
Activision Blizzard's Q2: Numbers Solid, Long-Term Catalysts Intact
Seeking Alpha - Aug 8, 2017
Activision Blizzard (NASDAQ:ATVI) recently beat expectations for the second-quarter results. Seeking Alpha says that GAAP earnings of $0.32 per share were ahead by $0.16.
Activision Blizzard's Late-Week Reversal May Set Up Game in Investors' Favor - TheStreet.com
Take-Two And Activision Blizzard Diverge In Their Earnings Reactions - Benzinga
3 Stocks That Look Just Like Activision Blizzard in 2013
Motley Fool - Aug 15, 2017
Back in 2013, video game giant Activision Blizzard Inc. (NASDAQ:ATVI) made a huge move, when CEO Bobby Kotick led an investor group that freed the company from the majority ownership of Vivendi, which had shadowed the company -- and made ...
Activision Blizzard, Inc. (ATVI) Q2 Earnings Recap: 10 Things to Know
Investorplace.com - Aug 4, 2017
Activision Blizzard, Inc. also updated its outlook for the full year of 2017 and it wasn't good for ATVI stock. The company says that it expects earnings per share of $1.94 on revenue of $6.4 billion.
Activision Blizzard, Inc (NASDAQ:ATVI) Sees Unusual Trading Volume in Its Shares - Modern Readers
Activision Blizzard's FY forecasts get a lift from 'Overwatch'
Reuters - Aug 3, 2017
(Reuters) - Activision Blizzard Inc raised its full-year adjusted revenue and profit forecasts for the second time on Thursday, as the videogame publisher benefits from higher digital sales and the popularity of its multi-player futuristic game ...
Earnings Reaction History: Activision Blizzard, Inc., 50.0% Follow-Through ...
Nasdaq - Aug 3, 2017
Activision Blizzard, Inc. ( ATVI ) is due to issue its quarterly earnings report in the upcoming extended-hours session.
What Catalysts Are There Behind Activision Blizzard, Inc. (NasdaqGS:ATVI)?
Stock Talker - 4 hours ago
Activision Blizzard, Inc. (NasdaqGS:ATVI) presently has a current ratio of 2.47. The current ratio, also known as the working capital ratio, is a liquidity ratio that displays the proportion of current assets of a business relative to the current ...
Insider Trading Activity – Activision Blizzard, Inc (NASDAQ:ATVI) - Modern Readers
Which Way Traders Signposts Activision Blizzard, Inc. (ATVI), Sysco ... - StockNewsJournal
Activision Earnings Prediction
Seeking Alpha - Jul 27, 2017
I estimate that Activision Blizzard (ATVI) will likely report better than expected earnings. Primary reasons are new launches as well as clever tactics used to increase engagement which in turn increases sales ...
Earnings Watch: Apple, Tesla, Pfizer, Activision-Blizzard On Tap For Next Week - Benzinga
Activision Blizzard, Inc (NASDAQ:ATVI) Reaches New 12-Month High at $62.58 - Newburgh Gazette
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.

$62.01 Current Price

$41.86 Growth Price (DCF)

Overvalued by 32.49%


Growth Rate Assumed by Market: 25.96%


Future Free Cash Flow Growth Rate: 13.6%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$14.96 Stability Price (EPV)

Overvalued by 75.87%


Discount Rate: 15.0%

$33.45 Book Price

Overvalued by 46.05%


Excellent Cash Return on Invested Capital over the past 5 years

ATVI has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

ATVI has created $15.67 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 1.27B 1.19B 1.19B 1.08B 2.02B
divided by
Invested Capital 7.17B 7.16B 7.17B 10.81B 11.55B
Cash ROIC 17.73% 16.61% 16.52% 10.00% 17.48%

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 $11.72 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.15B 1.01B 835.00M 892.00M 966.00M
divided by
Stockholders' Equity 11.32B 6.62B 7.23B 8.07B 9.12B
Return on Equity 10.15% 15.25% 11.54% 11.06% 10.59%

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
2007200820092010201120122013201420152016
Free Cash Flow 9.23M 544.10M 1.11B 1.28B 880.00M 1.27B 1.19B 1.19B 1.08B 2.02B

Strong Balance Sheet

ATVI is financially strong with Current Assets covering Total Liabilities. It's in a fairly liquid position and dependent on the amount and saleability of any inventory; it may have the financial security to survive an economic downturn.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 954.85M 1.45B 3.25B 3.51B 3.53B 4.38B 4.44B 4.86B 1.83B 3.25B
Current Assets 1.40B 1.98B 5.33B 5.39B 5.38B 6.27B 6.24B 6.91B 3.39B 4.83B
Total Assets 1.79B 2.53B 13.74B 13.41B 13.28B 14.20B 14.01B 14.75B 15.25B 17.45B
Current Liabilities 341.17M 556.07M 2.51B 2.91B 2.56B 2.65B 2.41B 2.71B 2.61B 2.66B
Total Liabilities 382.42M 582.78M 2.99B 3.20B 2.79B 2.88B 7.39B 7.51B 7.18B 8.33B
Stockholder' Equity 1.41B 1.95B 10.76B 10.20B 10.49B 11.32B 6.62B 7.23B 8.07B 9.12B
Current Ratio 4.11 3.56 2.13 1.85 2.10 2.37 2.60 2.55 1.30 1.82
TL-to-TA 0.21 0.23 0.22 0.24 0.21 0.20 0.53 0.51 0.47 0.48

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
2007200820092010201120122013201420152016
Retained Earnings 427.78M 772.66M -361.00M 57.00M 948.00M 1.89B 2.69B 3.37B 4.10B 4.87B
Retained Earnings Growth - 80.62% -146.72% 115.79% 1,563.16% 99.68% 41.89% 25.61% 21.40% 18.87%

Inconsistent Net Profit Margins over the past 10 years

ATVI potentially has a competitive advantage, however inconsistent profit margins are a cause for concern. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$15.08 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 85.79M 344.88M 113.00M 418.00M 1.09B 1.15B 1.01B 835.00M 892.00M 966.00M
divided by
Revenue 1.51B 2.90B 4.28B 4.45B 4.76B 4.86B 4.58B 4.41B 4.66B 6.61B
Net Profit Margin 5.67% 11.90% 2.64% 9.40% 22.82% 23.66% 22.04% 18.94% 19.13% 14.62%

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.

$59.08 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
2007200820092010201120122013201420152016
Gross Profit 534.95M 1.25B 1.97B 2.32B 4.11B 3.19B 3.05B 2.88B 3.08B 4.21B
divided by
Revenue 1.51B 2.90B 4.28B 4.45B 4.76B 4.86B 4.58B 4.41B 4.66B 6.61B
Gross Margin 35.36% 43.22% 46.09% 52.19% 86.41% 65.77% 66.59% 65.40% 66.02% 63.77%

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.

17.34% 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
2007200820092010201120122013201420152016
Capital Expenditure 17.94M 29.40M 69.00M 97.00M 72.00M 73.00M 74.00M 107.00M 111.00M 136.00M
divided by
Net Income 85.79M 344.88M 113.00M 418.00M 1.09B 1.15B 1.01B 835.00M 892.00M 966.00M
Capital Expenditure Ratio 20.91% 8.52% 61.06% 23.21% 6.64% 6.35% 7.33% 12.81% 12.44% 14.08%

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
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 610.68M 629.46M 1.31B 1.24B 1.16B 1.12B 1.04B 726.00M 739.00M 754.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 14.22 8.30 11.07 12.38 12.32 10.56 17.80 20.24 39.43 36.11
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
2007200820092010201120122013201420152016
Shares Outstanding 610.68M 629.46M 1.31B 1.24B 1.16B 1.12B 1.04B 726.00M 739.00M 754.00M
Stock Bought Back - -2.98% -51.99% 6.07% 6.92% 3.40% 8.02% 42.56% -1.76% -1.99%
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