Activision Blizzard, Inc (ATVI) Dips More Than Broader Markets: What You Should Know

·3-min read

Activision Blizzard, Inc (ATVI) closed at $94.06 in the latest trading session, marking a -1.99% move from the prior day. This change lagged the S&P 500's 0.54% loss on the day.

Coming into today, shares of the company had gained 2.47% in the past month. In that same time, the Consumer Discretionary sector gained 0.6%, while the S&P 500 gained 1.91%.

Investors will be hoping for strength from ATVI as it approaches its next earnings release. The company is expected to report EPS of $0.75, down 22.68% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.88 billion, down 9.52% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.78 per share and revenue of $8.79 billion, which would represent changes of +8.93% and +4.47%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ATVI. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. ATVI currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, ATVI is holding a Forward P/E ratio of 25.42. Its industry sports an average Forward P/E of 22.47, so we one might conclude that ATVI is trading at a premium comparatively.

We can also see that ATVI currently has a PEG ratio of 1.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Toys - Games - Hobbies industry currently had an average PEG ratio of 2.36 as of yesterday's close.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 112, putting it in the top 45% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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