|Bid||122.17 x 1400|
|Ask||122.80 x 800|
|Day's Range||120.95 - 123.15|
|52 Week Range||84.41 - 135.70|
|Beta (3Y Monthly)||0.68|
|PE Ratio (TTM)||45.54|
|Earnings Date||Nov 7, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||135.15|
Investing.com - Electronic Arts (NASDAQ:EA) led a wave of red across video game stocks Friday on data showing gamers held back on spending in September as they await the next generation of consoles slated for next year.
Take-Two (TTWO) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
The case for video gaming plays like Electronic Arts (NASDAQ:EA) seems reasonably simple. Gaming demand continues to rise. The transition to digital downloads has bypassed retailers like GameStop (NYSE:GME) and Walmart (NYSE:WMT), presumably boosting margins in the process. For Electronic Arts stock, in particular, dominant sports franchises provide a stable profit baseline - and perhaps a floor to valuation.Source: Konstantin Savusia / Shutterstock.com The problem at the moment is that the case has held for a few years now. And EA stock has done nothing. In fact, it's traded down 14% over the last 29 months.In other words, that bull case doesn't look like quite enough. Electronic Arts needs to show more. The problem, less than three weeks out from fiscal second-quarter earnings, is that it's not at all clear what the company can do to surprise investors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips EA Stock Falls FlatThe problem with EA isn't just a matter of the market's reaction. Operationally, EA hasn't performed well. Net bookings actually are down 4%+ over the past twelve months, according to figures from the company's fiscal Q1 release. That includes just a 5% increase in digital net bookings, the supposed growth driver. * 10 Super Boring Stocks to Buy With Super Safe Returns EA doesn't disclose non-GAAP figures, but it does seem like earnings growth is relatively minimal. Analyst consensus for EPS this year (and the Street usually uses adjusted figures) suggests a roughly 8% increase year-over-year. There's some help from share buybacks in there as well.Even at an admittedly reasonable multiple, that doesn't look quite enough. And it's with the help from Apex Legends that spiked the stock above $100 earlier this year. I thought those gains were overdone, and that appears to have been the case. Indeed, Electronic Arts stock fell almost 10% in two sessions when Season 2 of Apex began - and hasn't recovered since. Electronic Arts Stock Lacks a DriverSo what's the bull case now? The case for just buying video game stocks seems to have run its course. Indeed, rival Activision Blizzard (NASDAQ:ATVI) similarly has fallen sharply from 2018 highs, though ATVI has rallied in recent weeks.Take-Two Interactive (NASDAQ:TTWO) did almost get back to last year's levels before a recent fade, but that's kind of the point. Unlike EA and Activision Blizzard, Take-Two isn't just reliant on older franchises. Those franchises - whether it's Call of Duty or Madden - aren't driving enough growth. It's Fortnite, and even social gaming, that look more attractive at the moment.And so the key question for Electronic Arts is: where is its new franchise? Where is its new growth driver? The company doesn't have an answer right now, which is why EA stock has traded sideways for most of this year. The Case for EA StockTo be fair, what EA can deliver might be enough to drive some upside in Electronic Arts stock. EA is cheap, at a little over 20x fiscal 2020 consensus EPS estimates. Back out the company's cash hoard (about $14 per share)and the multiple drops to a reasonable 17x.That's a multiple that likely only prices in single-digit growth - and that's what Electronic Arts can deliver. So an investor can perhaps afford to be patient here, hoping for an earnings beat later this month, an acceleration in Apex Legends, or new momentum behind one of the legacy sports franchises.At the same time, however, that's not a very compelling bull case. And it leaves the same problem: something here needs to change. The old bull case isn't working. Electronic Arts needs a new one - but it's not yet clear what it can be.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post There Doesn't Appear to Be a Clear Path Forward for EA Stock appeared first on InvestorPlace.
At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps […]
The game publisher was at the center of controversy after it suspended a top e-sports player for expressing his support of the Hong Kong protesters. The National Basketball Association and (AAPL)(AAPL) were also tripped up by the Hong Kong situation during the past week, with an NBA executive tweeting support for the Hong Kong protesters and Apple pulling an app that was used by them. Despite it all, Apple shares still closed at an all-time high on Friday, while Activision was only off 1.1% for the week.
Take-Two Interactive Software, Inc. today announced that it plans to report financial results for the second quarter of its fiscal year 2020, ended September 30, 2019, after the market close on Thursday, November 7, 2019.
Advanced Micro Devices (AMD) unveils Radeon RX 5500 Series, which is expected to enhance user gaming experience amid increasing competition.
Take-Two Interactive Software Inc.'s stock is up 1.5% in midday trading Friday after the company said its "Red Dead Redemption 2" title would be available on PCs starting Nov. 5. The company is promising bonuses to players who pre-order the game on its platform between Oct. 9 and Oct. 22. Take-Two said the PC version will have "a range of graphical and technical enhancements for increased immersion along with new Bounty Hunting Missions, Gang Hideouts, Weapons and more." Shares have risen 19% so far this year, while the S&P 500 has gained 17%.
Shares of Take-Two Interactive rose Friday after the company's Rockstar Games unit announced the release date of a PC version of its popular video game: Red Dead Redemption II.
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...
(Bloomberg) -- Sony Corp. cut the price of its PlayStation Now video-game service in half, to $9.99 a month, a reflection of the increasing competition in online offerings.The industry leader in video games said Tuesday it’s also adding limited runs of top-selling titles to the service, such as Take-Two Interactive Software Inc.’s Grand Theft Auto V, and launching the first global marketing campaign to promote PlayStation Now.“It’s a combination of us having expanded into 19 territories and all of the learning since we started this service,” Grace Chen, vice president of PlayStation’s global services unit, said in an interview. “Consumers are moving toward this type of price point.”Microsoft Corp.’s Xbox Game Pass service also starts at $9.99 a month. Sony’s price cut takes effect immediately. Separately, Sony said Shawn Layden, the head of its game-design studios, is leaving. He’d been with the company since at least 1996.Subscription-based video-game services are becoming popular as streaming technology improves, consumers see fewer reasons to own their favorite titles, and companies search for recurring revenue sources.Apple Inc. introduced its Arcade service two weeks ago at a monthly price of $4.99. It features games created exclusively for the service. Google’s $9.99-a-month Stadia product, which uses its own $69 controller, will debut next month with well-known games from companies such as Cubist Entertainment SA.PlayStation Now originally debuted in 2014 as a game rental service. It switched to a monthly subscription model and now has over 700,000 subscribers.As part of the new campaign, Sony is preparing the first television commercial for the service, the company said. While PlayStation Now features over 800 games, the marquee titles will rotate out after a couple of months with new ones added monthly. Customers will be able to download the games or play them using the cloud.(Updates with executive’s departure in fourth paragraph)To contact the reporter on this story: Christopher Palmeri in Los Angeles at email@example.comTo contact the editors responsible for this story: Nick Turner at firstname.lastname@example.org, Rob Golum, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Gen.G's Team will be 23rd NBA 2K League Team and First Outside of North America - - Gen.G and NBA 2K League Announce Long-Term Strategic Relationship to Grow the League's Player Pool and Fanbase with ...
Activision Blizzard (ATVI) is expected to benefit from Call of Duty franchise strength following the launch of Black Ops 4's new content season.
2K today announced that Sid Meier’s Civilization® VI is coming to Xbox One and PlayStation® 4 on November 22, 2019. Winner of The Game Awards’ Best Strategy Game and DICE Awards’ Best Strategy Game in 2016, Civilization VI’s upcoming launch marks the first time since 2008 that a Civilization game has been available on Xbox or PlayStation consoles. The base game will be available for $59.99, and all expansion content will be made available as part of a separate Civilization VI Expansion Bundle for $49.99.
Shares of video game publisher Activision (NASDAQ:ATVI) plunged in late 2018 alongside the rest of the market on slowing growth concerns. But, unlike the rest of the market, Activision stock didn't bounce back in early 2019.Source: Lauren Elisabeth / Shutterstock.com Instead, ATVI kept falling. Through the end of May 2019, the S&P 500 was up 10% year-to-date. The stock, meanwhile, was down 7% year-to-date.That's all changed recently. From the end of May 2019 to today, the S&P 500 has climbed 9%. ATVI stock is up a whopping 24% over that stretch.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhy the change of trend in ATVI stock? And, more importantly, will it last?In short, the change of trend in ATVI stock has to do with investors realizing that, while video-game trends are depressed today, both Activision and the video game market are set for big growth in 2020 and 2021. * 7 Worst Stocks in the S&P 500 in 2019 Investors are buying ahead of all that growth. But, all that growth still isn't fully priced into the stock, and the fundamentals say that this stock should trade north of $60 within the next 12 months.As such, while I like ATVI stock less at $53 than I did at $43, I still like Activision stock here, and think that there's healthy upside potential in the foreseeable future. The Fundamentals Are Rock SolidThe core fundamentals underlying Activision stock are rock solid and pave the way for this company to have an outstanding 2020 and 2021.Big picture, the video game market is a secular growth market, with consistent double-digit sales growth driven by secular trends such as increasing digital channel consumption, global urbanization, and next-gen tech innovation.This secular growth market has huge catalysts on the horizon, with the launch of a new generation of video game consoles in 2020 - the first new-gen console refresh cycle since 2013. New-gen console refresh cycles always provide huge upward catalysts for the whole market. This one should do that even more because these new consoles will have cloud gaming capability.In this secular growth market with huge catalysts on the horizon, Activision is a very important player with broad exposure. Everywhere the gamer is, Activision is there, too. In the console world, Activision owns arguably the video game world's most successful franchise ever, Call of Duty.In the desktop world, Activision owns fan favorite titles such as World of Warcraft and Diablo. On the mobile front, Activision is behind arguably the mobile world's most successful franchise ever, Candy Crush. On the eSports front, Activision owns the world's most fleshed-out and popular eSports league in Overwatch League.Because of this broad exposure, as goes the video game market, so goes Activision. In 2020 and 2021, then, as the video game market surges higher on the back on new console releases, Activision's revenues and profits should surge higher, too, which should lead to a sizable rally in ATVI stock. Activision Stock Has UpsideThe numbers here for ATVI to be a $60 stock in 12 months aren't too hard to follow.The global video game projects to grow sales at an 8% clip in both 2020 and 2021. Activision, given its broad and healthy exposure to the new console refresh cycle in late 2020, projects as a bigger grower during this stretch. At present, the Street is modeling for 8-11% revenue growth in 2020 and 2021 for Activision. That seems about right me.During this stretch of high single-digit to low double-digit revenue growth, profit margins should trend higher thanks to three things.First, favorable demand drivers will give Activision strong pricing power on its new releases, leading to higher gross margins. Second, favorable engagement drivers will increase the volume of micro-transactions in 2020/21, which should also boost margins. Third, high single-digit to low double-digit revenue growth is enough to drive positive operating leverage throughout the whole business.Big picture, then, Activision projects as a high single-digit to low double-digit revenue grower over the next two years, with favorable upside margin drivers. That should produce low to mid-teens EPS growth. Indeed, Wall Street expects Activision to grow EPS by 15% in 2020 and 13% in 2021, to a 2021 EPS base of about $2.85.The video game stocks - Activision, Electronic Arts (NASDAQ:EA), and Take-Two Interactive (NASDAQ:TTWO) - historically trade around 22- to 23-times forward earnings. Based on the midpoint of that historically average valuation, $2.85 in 2021 EPS should correlate to a 2020 price target for ATVI stock of about $64.Thus, over the next 12 months, ATVI stock has visible and fundamentally supported upside to levels above $60. Bottom Line on Activision StockActivision stock is a long term winner that got ahead of itself in 2018 and has since taken a tumble, but with shares now more appropriately valued, the secular growth narrative in-tact, and significant upside catalysts on the horizon, ATVI stock looks ready to get back to winning mode over the next few quarters and years.As of this writing, Luke Lango was long ATVI and EA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Worst Stocks in the S&P 500 in 2019 * 7 Reasons to Own Intuit Stock -- The Unsung Hero of Fintech * Apple and 4 Other Tech Stocks on the Move The post Activision Stock Has Upside to $60 over the Next 12 Months appeared first on InvestorPlace.
The Zacks Analyst Blog Highlights: Activision Blizzard, Electronic Arts, Take-Two Interactive and Zynga
Take-Two Interactive shares are down Monday as sales of Borderlands 3 broke the New York videogame company's sales records but merely met industry expectations. Wedbush Securities analyst Michael Pachter told Barron's that "overly optimistic investors may be disappointed by the initial numbers." The firm has an outperform rating and $144 price target on the company.