Activision Blizzard Inc

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ATVI : NASDAQ : Technology
$41.44 | %
Today's Range: 40.93 - 41.68
Avg. Daily Volume: 9,179,300
07/22/16 - 4:00 PM ET

Financial Analysis


ACTIVISION BLIZZARD INC's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. ACTIVISION BLIZZARD INC has average liquidity. Currently, the Quick Ratio is 1.41 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 15.33% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)1455.01278.0
EBITDA ($mil)752.0709.0
EBIT ($mil)495.0542.0
Net Income ($mil)336.0394.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)2888.04470.0
Total Assets ($mil)17302.013777.0
Total Debt ($mil)5841.04075.0
Equity ($mil)8348.07238.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin83.9280.75
EBITDA Margin51.6855.47
Operating Margin34.0242.41
Sales Turnover0.280.33
Return on Assets4.826.79
Return on Equity9.9912.93
Debt Q1 FY16 Q1 FY15
Current Ratio1.733.09
Debt/Capital0.410.36
Interest Expense57.050.0
Interest Coverage8.6810.84


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)738.01725.91
Div / share0.260.23
EPS0.450.53
Book value / share11.319.97
Institutional Own % n/a n/a
Avg Daily Volume8898888.08922793.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 64.39 for the Software industry and a significant premium compared to the S&P 500 average of 25.03. Conducting a second comparison, its price-to-book ratio of 3.70 indicates a premium versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 6.80. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, ACTIVISION BLIZZARD INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ATVI 37.37 Peers 64.39   ATVI 23.86 Peers 21.74

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ATVI is trading at a significant discount to its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ATVI is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ATVI 20.02 Peers 48.62   ATVI 0.68 Peers 0.78

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ATVI is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ATVI trades at a discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ATVI 3.70 Peers 6.80   ATVI -11.82 Peers -35.22

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ATVI is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

ATVI is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ATVI 6.38 Peers 5.80   ATVI 5.81 Peers 5.73

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ATVI is trading at a premium to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

ATVI is keeping pace with its peers on the basis of sales growth.

 

 

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