NEW YORK (TheStreet) -- Activision Blizzard (ATVI - Get Report) was gaining 1.4% to $21.21 Monday as the video game publisher gets ready to show off new video games at the Electronic Entertainment Expo (E3) in Los Angeles.
At the trade show Activision Blizzard will show the latest game in its Call of Duty franchise, called Call of Duty: Advanced Warfare. The publisher will also showcase Skylanders Trap Team, the upcoming game in the popular Skylanders franchise, at the show.
Destiny, the next game from Bungie, creators of the Halo series, will also make an appearance at E3 before its release later this year.
TheStreet Ratings team rates ACTIVISION BLIZZARD INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACTIVISION BLIZZARD INC (ATVI) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, attractive valuation levels, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, ATVI's share price has jumped by 44.82%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ATVI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for ACTIVISION BLIZZARD INC is currently very high, coming in at 76.33%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 26.37% is above that of the industry average.
- ATVI's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that ATVI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.38 is high and demonstrates strong liquidity.
- ACTIVISION BLIZZARD INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, ACTIVISION BLIZZARD INC reported lower earnings of $0.95 versus $1.00 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.95).
- You can view the full analysis from the report here: ATVI Ratings Report