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Activision Blizzard, Inc (ATVI) Gains But Lags Market: What You Should Know

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Activision Blizzard, Inc (ATVI - Free Report) closed at $80.01 in the latest trading session, marking a +0.52% move from the prior day. The stock lagged the S&P 500's daily gain of 0.71%. Meanwhile, the Dow gained 0.27%, and the Nasdaq, a tech-heavy index, added 0.14%.

Heading into today, shares of the company had lost 2.26% over the past month, outpacing the Consumer Discretionary sector's loss of 2.83% and lagging the S&P 500's gain of 3.76% in that time.

Investors will be hoping for strength from Activision Blizzard, Inc as it approaches its next earnings release. In that report, analysts expect Activision Blizzard, Inc to post earnings of $0.73 per share. This would mark a year-over-year decline of 13.1%. Our most recent consensus estimate is calling for quarterly revenue of $1.8 billion, down 12.86% from the year-ago period.

ATVI's full-year Zacks Consensus Estimates are calling for earnings of $3.60 per share and revenue of $8.57 billion. These results would represent year-over-year changes of -3.23% and +2.54%, respectively.

It is also important to note the recent changes to analyst estimates for Activision Blizzard, Inc. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. Activision Blizzard, Inc is currently a Zacks Rank #3 (Hold).

In terms of valuation, Activision Blizzard, Inc is currently trading at a Forward P/E ratio of 22.09. Its industry sports an average Forward P/E of 16.72, so we one might conclude that Activision Blizzard, Inc is trading at a premium comparatively.

Also, we should mention that ATVI has a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Toys - Games - Hobbies industry currently had an average PEG ratio of 2.18 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 39, which puts it in the top 16% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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