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ACTIVISION BLIZZARD INC (ATVI) Stock Fundamental Analysis

NASDAQ:ATVI - Nasdaq - US00507V1098 - Common Stock - Currency: USD

94.42  -0.05 (-0.05%)

After market: 94.54 +0.12 (+0.13%)

Fundamental Rating

7

ATVI gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 72 industry peers in the Entertainment industry. ATVI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. ATVI is not valued too expensively and it also shows a decent growth rate. These ratings could make ATVI a good candidate for quality investing.


Dividend Valuation Growth Profitability Health

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8

1. Profitability

1.1 Basic Checks

In the past year ATVI was profitable.
ATVI had a positive operating cash flow in the past year.
ATVI had positive earnings in each of the past 5 years.
Each year in the past 5 years ATVI had a positive operating cash flow.
ATVI Yearly Net Income VS EBIT VS OCF VS FCFATVI Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 1B 2B 3B

1.2 Ratios

The Return On Assets of ATVI (7.59%) is better than 88.31% of its industry peers.
With an excellent Return On Equity value of 10.41%, ATVI belongs to the best of the industry, outperforming 87.01% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 7.64%, ATVI belongs to the top of the industry, outperforming 84.42% of the companies in the same industry.
ATVI had an Average Return On Invested Capital over the past 3 years of 10.28%. This is significantly below the industry average of 22.90%.
Industry RankSector Rank
ROA 7.59%
ROE 10.41%
ROIC 7.64%
ROA(3y)8.6%
ROA(5y)8.74%
ROE(3y)12.6%
ROE(5y)13.15%
ROIC(3y)10.28%
ROIC(5y)10.19%
ATVI Yearly ROA, ROE, ROICATVI Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 5 10 15

1.3 Margins

Looking at the Profit Margin, with a value of 24.87%, ATVI belongs to the top of the industry, outperforming 98.70% of the companies in the same industry.
In the last couple of years the Profit Margin of ATVI has grown nicely.
With an excellent Operating Margin value of 25.71%, ATVI belongs to the best of the industry, outperforming 98.70% of the companies in the same industry.
ATVI's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 70.38%, ATVI belongs to the top of the industry, outperforming 87.01% of the companies in the same industry.
ATVI's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 25.71%
PM (TTM) 24.87%
GM 70.38%
OM growth 3Y-6.16%
OM growth 5Y3.49%
PM growth 3Y-4.62%
PM growth 5Y38.88%
GM growth 3Y1.34%
GM growth 5Y1.83%
ATVI Yearly Profit, Operating, Gross MarginsATVI Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 20 40 60

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8

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ATVI is still creating some value.
ATVI has more shares outstanding than it did 1 year ago.
The debt/assets ratio for ATVI has been reduced compared to a year ago.
ATVI Yearly Shares OutstandingATVI Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 200M 400M 600M
ATVI Yearly Total Debt VS Total AssetsATVI Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 5B 10B 15B 20B 25B

2.2 Solvency

An Altman-Z score of 7.56 indicates that ATVI is not in any danger for bankruptcy at the moment.
The Altman-Z score of ATVI (7.56) is better than 93.51% of its industry peers.
The Debt to FCF ratio of ATVI is 1.48, which is an excellent value as it means it would take ATVI, only 1.48 years of fcf income to pay off all of its debts.
ATVI's Debt to FCF ratio of 1.48 is amongst the best of the industry. ATVI outperforms 90.91% of its industry peers.
A Debt/Equity ratio of 0.17 indicates that ATVI is not too dependend on debt financing.
ATVI has a Debt to Equity ratio of 0.17. This is in the better half of the industry: ATVI outperforms 64.94% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.17
Debt/FCF 1.48
Altman-Z 7.56
ROIC/WACC0.81
WACC9.47%
ATVI Yearly LT Debt VS Equity VS FCFATVI Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 5B 10B 15B

2.3 Liquidity

ATVI has a Current Ratio of 4.66. This indicates that ATVI is financially healthy and has no problem in meeting its short term obligations.
ATVI has a Current ratio of 4.66. This is amongst the best in the industry. ATVI outperforms 88.31% of its industry peers.
ATVI has a Quick Ratio of 4.66. This indicates that ATVI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 4.66, ATVI belongs to the top of the industry, outperforming 88.31% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 4.66
Quick Ratio 4.66
ATVI Yearly Current Assets VS Current LiabilitesATVI Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 5B 10B

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6

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 50.00% over the past year.
Measured over the past years, ATVI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.32% on average per year.
ATVI shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.88%.
The Revenue has been growing slightly by 1.42% on average over the past years.
EPS 1Y (TTM)50%
EPS 3Y14.92%
EPS 5Y8.32%
EPS Q2Q%129.79%
Revenue 1Y (TTM)13.88%
Revenue growth 3Y5.08%
Revenue growth 5Y1.42%
Sales Q2Q%34.25%

3.2 Future

Based on estimates for the next years, ATVI will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.90% on average per year.
The Revenue is expected to grow by 7.11% on average over the next years.
EPS Next Y26.69%
EPS Next 2Y15.13%
EPS Next 3Y12.41%
EPS Next 5Y8.9%
Revenue Next Year19.41%
Revenue Next 2Y10.08%
Revenue Next 3Y7.86%
Revenue Next 5Y7.11%

3.3 Evolution

The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
ATVI Yearly Revenue VS EstimatesATVI Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 5B 10B
ATVI Yearly EPS VS EstimatesATVI Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2 4 6

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6

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 22.32, ATVI is valued on the expensive side.
84.42% of the companies in the same industry are more expensive than ATVI, based on the Price/Earnings ratio.
ATVI is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 20.95, which indicates a rather expensive current valuation of ATVI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ATVI indicates a somewhat cheap valuation: ATVI is cheaper than 75.32% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. ATVI is around the same levels.
Industry RankSector Rank
PE 22.32
Fwd PE 20.95
ATVI Price Earnings VS Forward Price EarningsATVI Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as ATVI.
80.52% of the companies in the same industry are more expensive than ATVI, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 30.35
EV/EBITDA 23.76
ATVI Per share dataATVI EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 5 10 15 20 25

4.3 Compensation for Growth

ATVI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ATVI has an outstanding profitability rating, which may justify a higher PE ratio.
ATVI's earnings are expected to grow with 12.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.84
PEG (5Y)2.68
EPS Next 2Y15.13%
EPS Next 3Y12.41%

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5

5. Dividend

5.1 Amount

ATVI has a Yearly Dividend Yield of 1.05%.
Compared to an average industry Dividend Yield of 6.64, ATVI pays a better dividend. On top of this ATVI pays more dividend than 93.51% of the companies listed in the same industry.
With a Dividend Yield of 1.05, ATVI pays less dividend than the S&P500 average, which is at 2.42.
Industry RankSector Rank
Dividend Yield 1.05%

5.2 History

The dividend of ATVI is nicely growing with an annual growth rate of 9.32%!
ATVI has paid a dividend for at least 10 years, which is a reliable track record.
ATVI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.32%
Div Incr Years1
Div Non Decr Years13
ATVI Yearly Dividends per shareATVI Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2019 2020 2021 2022 2023 0.2 0.4 0.6 0.8

5.3 Sustainability

The dividend of ATVI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP0%
EPS Next 2Y15.13%
EPS Next 3Y12.41%
ATVI Yearly Income VS Free CF VS DividendATVI Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 500M 1B 1.5B 2B 2.5B

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ACTIVISION BLIZZARD INC

NASDAQ:ATVI (10/12/2023, 8:26:42 PM)

After market: 94.54 +0.12 (+0.13%)

94.42

-0.05 (-0.05%)

Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)07-19 2023-07-19/bmo
Earnings (Next)11-06 2023-11-06/amc
Inst Owners0%
Inst Owner Change0%
Ins Owners20.1%
Ins Owner Change0%
Market Cap74.29B
Analysts68.46
Price Target96.68 (2.39%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.05%
Yearly Dividend0.47
Dividend Growth(5Y)9.32%
DP0%
Div Incr Years1
Div Non Decr Years13
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.86%
Min EPS beat(2)14.06%
Max EPS beat(2)19.67%
EPS beat(4)4
Avg EPS beat(4)22.22%
Min EPS beat(4)14.06%
Max EPS beat(4)33.83%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)11.02%
Min Revenue beat(2)-8.61%
Max Revenue beat(2)30.65%
Revenue beat(4)2
Avg Revenue beat(4)-0.61%
Min Revenue beat(4)-27.58%
Max Revenue beat(4)30.65%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)-0.03%
PT rev (3m)4.22%
EPS NQ rev (1m)2.28%
EPS NQ rev (3m)-0.37%
EPS NY rev (1m)0%
EPS NY rev (3m)10.04%
Revenue NQ rev (1m)99900%
Revenue NQ rev (3m)-2.26%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.91%
Valuation
Industry RankSector Rank
PE 22.32
Fwd PE 20.95
P/S 8.53
P/FCF 30.35
P/OCF 29.17
P/B 3.57
P/tB 7.62
EV/EBITDA 23.76
EPS(TTM)4.23
EY4.48%
EPS(NY)4.51
Fwd EY4.77%
FCF(TTM)3.11
FCFY3.3%
OCF(TTM)3.24
OCFY3.43%
SpS11.07
BVpS26.43
TBVpS12.38
PEG (NY)0.84
PEG (5Y)2.68
Profitability
Industry RankSector Rank
ROA 7.59%
ROE 10.41%
ROCE 8.88%
ROIC 7.64%
ROICexc 15.98%
ROICexgc 192.53%
OM 25.71%
PM (TTM) 24.87%
GM 70.38%
FCFM 28.12%
ROA(3y)8.6%
ROA(5y)8.74%
ROE(3y)12.6%
ROE(5y)13.15%
ROIC(3y)10.28%
ROIC(5y)10.19%
ROICexc(3y)19.25%
ROICexc(5y)17.42%
ROICexgc(3y)231.4%
ROICexgc(5y)290.82%
ROCE(3y)11.95%
ROCE(5y)11.85%
ROICexcg growth 3Y2.43%
ROICexcg growth 5YN/A
ROICexc growth 3Y-3.08%
ROICexc growth 5Y2.37%
OM growth 3Y-6.16%
OM growth 5Y3.49%
PM growth 3Y-4.62%
PM growth 5Y38.88%
GM growth 3Y1.34%
GM growth 5Y1.83%
F-Score5
Asset Turnover0.31
Health
Industry RankSector Rank
Debt/Equity 0.17
Debt/FCF 1.48
Debt/EBITDA 1.38
Cap/Depr 25.58%
Cap/Sales 1.14%
Interest Coverage 250
Cash Conversion 97.03%
Profit Quality 113.07%
Current Ratio 4.66
Quick Ratio 4.66
Altman-Z 7.56
F-Score5
WACC9.47%
ROIC/WACC0.81
Cap/Depr(3y)21.4%
Cap/Depr(5y)19.66%
Cap/Sales(3y)1.03%
Cap/Sales(5y)1.32%
Profit Quality(3y)108.71%
Profit Quality(5y)106%
High Growth Momentum
Growth
EPS 1Y (TTM)50%
EPS 3Y14.92%
EPS 5Y8.32%
EPS Q2Q%129.79%
EPS Next Y26.69%
EPS Next 2Y15.13%
EPS Next 3Y12.41%
EPS Next 5Y8.9%
Revenue 1Y (TTM)13.88%
Revenue growth 3Y5.08%
Revenue growth 5Y1.42%
Sales Q2Q%34.25%
Revenue Next Year19.41%
Revenue Next 2Y10.08%
Revenue Next 3Y7.86%
Revenue Next 5Y7.11%
EBIT growth 1Y-4.81%
EBIT growth 3Y-1.4%
EBIT growth 5Y4.95%
EBIT Next Year27.57%
EBIT Next 3Y13.63%
EBIT Next 5Y12.47%
FCF growth 1Y-1.53%
FCF growth 3Y7.47%
FCF growth 5Y0.68%
OCF growth 1Y-0.82%
OCF growth 3Y6.63%
OCF growth 5Y0.06%