With a market capitalization of $63,254,915,153, Activision Blizzard Inc has a greater market value than 96.94% of US stocks.
ATVI's one year PEG ratio, measuring expected growth in earnings next year relative to current common stock price is 268.52 -- higher than 87.43% of US-listed equities with positive expected earnings growth.
The price/operating cash flow metric for Activision Blizzard Inc is higher than 87.27% of stocks in our set with a positive cash flow.
Stocks that are quantitatively similar to ATVI, based on their financial statements, market capitalization, and price volatility, are BIIB, ILMN, BDX, BSX, and NTES.
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:
We started the process of determining a valid price forecast for Activision Blizzard Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Activision Blizzard Inc ranked in the 26th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 56.67%. The most interesting components of our discounted cash flow analysis for Activision Blizzard Inc ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 58.91 -- which is good for besting 90.47% of its peer stocks (US stocks in the Technology sector with positive cash flow).
The business' balance sheet suggests that 4% of the company's capital is sourced from debt; this is greater than just 12.48% 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 45.81% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as ATVI, try GRUB, INFY, MTCH, DOCU, and FARO.
(Source: Pixabay image and Author text) Software companies have been experiencing a fantastic period of growth (even pre-COVID-19). With their model of low margins and exponential scaling potential, the market has been realizing just how valuable some of these companies can be. The onset of COVID-19 and the need for...
Ryan Telford on Seeking Alpha | September 28, 2020
In other words, instead of buying companies at a discount that are struggling, one should invest in businesses that can post strong revenue growth no matter what. Activision Blizzard also blasted through its guidance for Q2 2020, bringing in $1.9 billion in revenue and $0.81 in earnings per share (EPS), compared with $1.4 billion in revenue and $0.53 in EPS for Q2 2019. The increase in sales was primarily the result of growing user count in the company's Call of Duty, World of Warcraft, and Candy Crush franchises.