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

Zacks Equity Research
In the latest trading session, JinkoSolar (JKS) closed at $20.22, marking a -1.03% move from the previous day.

In the latest trading session, Activision Blizzard (ATVI) closed at $46.19, marking a -0.5% move from the previous day. This change lagged the S&P 500's daily loss of 0.29%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq gained 0.07%.

Heading into today, shares of the maker of "Call of Duty" and other video games had gained 4.36% over the past month, outpacing the Consumer Discretionary sector's loss of 0.55% and the S&P 500's gain of 2.14% in that time.

Wall Street will be looking for positivity from ATVI as it approaches its next earnings report date. In that report, analysts expect ATVI to post earnings of $0.26 per share. This would mark a year-over-year decline of 31.58%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.24 billion, down 10.39% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.23 per share and revenue of $6.49 billion. These totals would mark changes of -14.23% and -10.64%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for ATVI. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.96% lower within the past month. ATVI is currently a Zacks Rank #3 (Hold).

Investors should also note ATVI's current valuation metrics, including its Forward P/E ratio of 20.83. This valuation marks a premium compared to its industry's average Forward P/E of 20.33.

It is also worth noting that ATVI currently has a PEG ratio of 1.97. 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 was holding an average PEG ratio of 1.69 at yesterday's closing price.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 77, which puts it in the top 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ATVI in the coming trading sessions, be sure to utilize Zacks.com.


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