NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 2.4%. Since the same quarter one year prior, revenues rose by 18.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ATVI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, ATVI has a quick ratio of 2.48, which demonstrates the ability of the company to cover short-term liquidity needs.
- ACTIVISION BLIZZARD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ACTIVISION BLIZZARD INC increased its bottom line by earning $0.31 versus $0.07 in the prior year. This year, the market expects an improvement in earnings ($0.78 versus $0.31).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 53.0% when compared to the same quarter one year prior, rising from $219.00 million to $335.00 million.
Activision Blizzard, Inc., through its subsidiaries, publishes online, personal computer (PC), console, and handheld games worldwide. The company develops and publishes PC-based computer games and maintains its proprietary online-game related service, Battle.net. The company has a P/E ratio of 18.8, below the average computer software & services industry P/E ratio of 19.1 and above the S&P 500 P/E ratio of 17.7. Activision Blizzard has a market cap of $12.2 billion and is part of the
industry. Shares are down 14.2% year to date as of the close of trading on Tuesday.
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