ATVI - Embedded Expectations Analysis - 2020 03 20
ï€ Activision Blizzard, Inc. (ATVI:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) Earnings, with a 24.1x Uniform P/E. Even at these levels, the market has slightly bearish expectations for the firm, and management may be concerned about King revenue, the sustainability of recent margin growth, and player engagementï€ Specifically, management may be concerned about their approach towards capital allocation and the sustainability of Call of Duty revenue growth. In addition, management may lack confidence in their ability to sustain recent operating margin growth in their Blizzard portfolio and whether Hearthstone and Overwatch can drive engagement and player investment. Furthermore, they may lack confidence in their capability to attract mobile payer engagement, and they may have concerns about the sustainability of revenue in their King portfolio. Finally, they may also be concerned about the impact of their decision to remove the Season Pass, and they may be exaggerating their enthusiasm about their 2019 financial performance
Activision Blizzard is a global developer and publisher of interactive entertainment content and services. The company's segments are: Activision Publishing, Inc., which is a global developer and publisher of interactive software products and entertainment content, particularly for the console platform; Blizzard Entertainment, Inc., which is a global developer and publisher of interactive software products and entertainment content, particularly for the personal computers platform; and King Digital Entertainment, which is a global developer and publisher of interactive entertainment content and services, particularly for the mobile platform, including for Google Inc.'s Android and Apple Inc.'s iOS.
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