Activision Blizzard, Inc (ATVI) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
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Activision Blizzard, Inc (ATVI) closed at $96.46 in the latest trading session, marking a -0.39% move from the prior day. This move lagged the S&P 500's daily gain of 0.42%.

Prior to today's trading, shares of the company had gained 5.21% over the past month. This has outpaced the Consumer Discretionary sector's loss of 1.89% and lagged the S&P 500's gain of 6.32% in that time.

ATVI will be looking to display strength as it nears its next earnings release, which is expected to be May 4, 2021. In that report, analysts expect ATVI to post earnings of $0.70 per share. This would mark year-over-year growth of 20.69%. Meanwhile, our latest consensus estimate is calling for revenue of $1.77 billion, up 16.52% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $3.67 per share and revenue of $8.53 billion. These totals would mark changes of +5.76% and +1.37%, respectively, from last year.

It is also important to note the 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. ATVI currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, ATVI is holding a Forward P/E ratio of 26.54. This represents a premium compared to its industry's average Forward P/E of 23.22.

Meanwhile, ATVI's PEG ratio is currently 1.46. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. ATVI's industry had an average PEG ratio of 1.78 as of yesterday's close.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 70, which puts it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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