Activision Blizzard develops and publishes online, personal computer (PC), video game console, handheld, mobile, and tablet games worldwide. The company was founded in 2008 and is based in Santa Monica, California.
ATVI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for ATVI, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Activision Blizzard Inc ranked in the 24th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for ATVI, they are:
The company has produced more trailing twelve month cash flow than 89.15% of its sector Technology.
The business' balance sheet suggests that 5% of the company's capital is sourced from debt; this is greater than only 16.84% of the free cash flow producing stocks we're observing.
ATVI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 43.14% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Activision Blizzard Inc? See ASML, BLKB, JKHY, CNDT, and HMSY.
More players are engaged with games than ever before, which is great news for Activision Blizzard (NASDAQ: ATVI), as it has some of the most enduring franchises on the market, including Call of Duty and World of Warcraft. While the availability of COVID-19 vaccines could be a threat to continued high player engagement in 2021, Activision Blizzard expects to keep growing the business this year, with a focus on execution. Plus, there could be a few surprises that investors are not expecting from new releases.