Morningstar | Ubisoft Reports Strong Revenue to Begin 2019; Continues to Benefit From Strong Back Catalog
Ubisoft posted a strong revenue start to fiscal 2019 as first-quarter revenue of EUR 400 million came well ahead of both guidance and consensus expectations. While Ubisoft only reports revenue for its fiscal first- and third-quarter results, management did reiterate its targets for fiscal 2019. The firm’s release schedule is back-end loaded with no major packaged release in the fiscal second quarter. However, the firm will release a number of digital products, including new seasons for Rainbow Six Siege and For Honor along with DLC for Far Cry 5 and Ghost Recon Wildlands. We are maintaining our narrow moat rating and fair value estimate of EUR 66 for Ubisoft. With shares trading well into 2-star territory, we recommend that investors wait for a pullback before investing.Revenue of EUR 400 million for the first quarter was well above guidance of EUR 350 million due to strong back catalog performance and the booking of revenue deferral under the new accounting standard. Player recurring revenue grew by 52% to EUR 126 million as the firm continues to benefit from its shift toward a games-as-a-service business model. We note that just before the end of its first quarter, the firm released another major title, The Crew 2, that is focused on long-term player engagement and microtransactions. While management was positive on the call on initial player engagement metrics, the critical response was considerably more mixed, which may weigh on the long-term potential for the game and franchise. Looking ahead, the other two major releases of fiscal 2019, Assassin’s Creed Odyssey and The Division 2, received much better critical response at E3, which should help the firm hit its 2019 targets.
Ubisoft Entertainment is an international independent developer, publisher & distributor of video games. Co. centers its business activities on developing, publishing & distributing video games for portable & home consoles, the PC, smartphones & tablets in both physical & online formats: high-definition with games for Xbox 360, PlayStation®3 & PC; casual with games for Nintendo®, KINECT & PlayStation®3 Move; and online for on-line games. Co.'s catalogue includes various types of games: Action/Adventure, Shooters, Sports, Strategy, Simulation, TV and Movie licenses, Games for everyone and Driving. Co.'s trademarks include Assassin's Creed®, Rainbow Six® Vegas 2, and Rayman Raving Rabids®.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.