Priya Ganapati
Activision's stock is now up 9.7% since the beginning of the year. The company's peer Electronic Arts(ERTS Quote - Cramer on ERTS - Stock Picks) has seen its shares go fall 7.5% during the same period.
Smaller rivals such as THQ(THQI Quote - Cramer on THQI - Stock Picks) and Midway(MWY Quote - Cramer on MWY - Stock Picks) have languished. THQ shares have plunged 30% since the beginning of the year while Midway is down about 17.3%. The Nasdaq composite index has fallen 6.6% in the same period. P/>There's still upside left to Activision's stock, says Dator. "I think there's probably a 10% upside from the stock's current levels," he said. "Activision can go up to $33 but beyond that, I wouldn't be a buyer." Todd Greenwald, an analyst with Signal Hill Capital Group, thinks Activision can go even higher. Greenwald says shares of Activision could trade up to the $35 to $40 level based on a multiple of 25-to-30 times the earnings estimate of $1.35 a share in 2009. Signal Hill does not own shares of Activision or have an investment banking relationship with the company. "With Blizzard, Activision should own some of the most valuable IP (intellectual property) in the industry as well as an abundance of platinum-selling licensed content," says Greenwald in a research note. "We believe the initial 2009 guidance is conservative and that Activision will continue its pattern of delivering upward revisions to estimates."
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