Activision Blizzard Inc
Exchange: NASDAQSector: Communication ServicesIndustry: Electronic Gaming & Multimedia
Headquartered in Santa Monica, California, Activision is a leading global producer and publisher of interactive entertainment connecting hundreds of millions of players around the world through the joy, fun and thrill of competition enabled by epic entertainment. Activision maintains operations throughout the world and is a division of Activision Blizzard, an S&P 500 company.
Did you know?
Free cash flow has been growing at 0.9% annually.
Current Price
$94.42
GoodMoat Value
$39.97
57.7% overvaluedProfile
Valuation (TTM)
Market Cap$74.23B
P/E34.29
EV$64.76B
P/B3.86
Shares Out786.16M
P/Sales8.53
Revenue$8.71B
EV/EBITDA20.38
Activision Blizzard Inc (ATVI) Stock Analysis
GoodMoat Analysis
Activision Blizzard is a leading video game publisher with a strong portfolio of iconic franchises, but its investment case is currently unfavourable. The stock trades at a significant premium to its estimated fair value, and the business does not meet the initial quality gate for a value investor's deeper analysis.
Read full analysis
Activision Blizzard develops and publishes major video game franchises like Call of Duty, World of Warcraft, and Candy Crush. Its competitive advantages include a powerful brand and cultural relevance, proprietary data from its massive player base, and high switching costs within its gaming ecosystems, which likely contribute to a solid Moat Score. However, applying the GoodMoat Decision Framework reveals a critical issue. The framework's first step is a 'Moat & Quality Gate,' requiring a Moat Score of at least 5 and predominantly 'Strong' quality ratings to proceed. While the moat may be sufficient, the provided data shows several quality metrics that are not strong for a value investor: a P/E of 34.3 is high for the sector, a Free Cash Flow Yield of 2.9% is low, and an ROE of 11.3% is below the high-return threshold of 15-20%. Most decisively, the stock price of $94.42 is 136% above the GoodMoat Target price of $39.97, indicating a severe lack of a margin of safety. This extreme valuation, combined with the mixed quality signals, means the stock fails the initial gate of the framework. Therefore, it does not qualify for further valuation analysis and is an unfavourable candidate for a value investor seeking a margin of safety. Analysis based on data as of 2024-05-15.
Market Cap$74.23B
Current Price$94.42
P/E Ratio34.29
Forward P/E—
PEG Ratio0.32
EPS$1.92
Book Value$24.48
P/B Ratio3.86
ATVI Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use 0.9% FCF growth (CAGR)
Cash vs Debt
Net Cash: 3.4B
Revenue
6.6B
FY16
7.0B
FY17
7.5B
FY18
6.5B
FY19
8.1B
FY20
8.8B
FY21
7.5B
FY22
Net Income
966M
FY16
273M
FY17
1.8B
FY18
1.5B
FY19
2.2B
FY20
2.7B
FY21
1.5B
FY22
Did you know?
Free cash flow has been growing at 0.9% annually.
Activision Blizzard Inc (ATVI) Financial Summary
Activision Blizzard Inc (ATVI) is a Communication Services company in the Electronic Gaming & Multimedia industry, listed on NASDAQ. The stock currently trades at $94.42 with a market capitalization of $74.23B.
Key valuation metrics include a P/E ratio of 34.29, price-to-book ratio of 3.86, and EPS of $1.92. The company reports a profit margin of 24.9% and return on equity of 11.3%.
ATVI Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $74.23B |
| P/E Ratio | 34.29 |
| EPS | $1.92 |
| P/B Ratio | 3.86 |
| P/S Ratio | 8.53 |
| EV/EBITDA | 20.38 |
| Dividend Yield | 0.49% |
| Profit Margin | 24.9% |
| Return on Equity | 11.3% |
| Debt/Equity | 0.19 |
ATVI Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY16 | $6.61B | $966.00M |
| FY17 | $7.02B | $273.00M |
| FY18 | $7.50B | $1.85B |
| FY19 | $6.49B | $1.50B |
| FY20 | $8.09B | $2.20B |
| FY21 | $8.80B | $2.70B |
| FY22 | $7.53B | $1.51B |
Activision Blizzard Inc (ATVI) Valuation
Based on GoodMoat's DCF model, Activision Blizzard Inc has a fair value estimate of $39.97. At the current price of $94.42, the stock appears 136.2% overvalued relative to our intrinsic value estimate.
ATVI Quality Indicators
Activision Blizzard Inc maintains a profit margin of 24.9% and an operating margin of 22.2%. Return on equity stands at 11.3%. The current ratio is 4.07. Debt-to-equity ratio is 0.19.
About Activision Blizzard Inc
Headquartered in Santa Monica, California, Activision is a leading global producer and publisher of interactive entertainment connecting hundreds of millions of players around the world through the joy, fun and thrill of competition enabled by epic entertainment. Activision maintains operations throughout the world and is a division of Activision Blizzard, an S&P 500 company.
ATVI Free Cash Flow
Activision Blizzard Inc generated $2.13B in trailing twelve-month free cash flow, representing an FCF yield of 2.87%. This moderate FCF yield indicates reasonable cash generation.
ATVI Shares Outstanding
Activision Blizzard Inc has 0.79 billion shares outstanding at a share price of $94.42, giving it a market capitalization of $74.23B.