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Bear of the Day: Activision Blizzard (ATVI)

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Activision Blizzard (ATVI - Free Report) is the Bear of the Day as it is a Zacks Rank #5 (Strong Sell).  But how could it be the Bear of the Day after it beat the Zacks Consensus Estimate the last time it reported?  That is a good question and one this article seeks to answer.  

Recent Earnings

ATVI last reported on November 8, and topped the Zacks Consensus Estimate of $0.51 by a penny.  That was good for a 2% positive earnings surprise, but the Zacks Rank is much more concerned with earnings estimates than just beating the number.

If the Rank were just about beating the number ATVI would be at the top as they have topped the Zacks Consensus Estimate in each of the last four quarters.

Estimate Revisions

Beating the number is great, but what really matters is what is ahead.  Analysts took estimates lower following the good quarter and that pushes the Zacks Rank down.

I see the current quarter shaping up for $1.30 in EPS, but that is down from 90 days ago when the Zacks Consensus Estimate was at $1.39.  

60 days ago the next quarter was looking for $0.54, but that number is also down to $0.49. 

90 days ago the 2018 full year estimate stood at $2.64, and now it is 3 cents lower.  The 2019 Zacks Consensus Estimate was at $2.96 and fell to $2.67 over the same time horizon.

End Of The Day

The Zacks Rank really cares most about what the Zacks Consensus Estimate does.  While there are some minor moves in estimates, the direction all looks to be trending in the same direction.  

Investors would be wise to wait and see how the next earnings results are before making a move on this gaming stock.

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