ATVI - Embedded Expectations Analysis - 2020 09 21
Activision Blizzard, Inc. (ATVI:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 23.6x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about Call of Duty Mobile, their pipeline's potential, and growthSpecifically, management may lack confidence in their ability to sustain Activision segment revenue growth, sustain net bookings growth, and maintain their large franchises' momentum. In addition, they may have concerns about the macroeconomic environment, and the potential of new mobile content in their pipeline, particularly new events and seasons for Call of Duty Mobile. Furthermore, they may lack confidence in their ability to continue supporting other franchises with in-game content, reinvest in Call of Duty Mobile, and maintain Call of Duty's current trajectory. Moreover, they may be exaggerating the number of new opportunities for the Call of Duty franchise and they may lack confidence in their ability to capitalize on digitalization tailwinds. Finally, they may be concerned about bringing Call of Duty to Blizzard's Battle.net
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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