Activision Blizzard Inc

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ATVI : NASDAQ : Technology
$35.71 | %
Today's Range: 35.12 - 36.02
Avg. Daily Volume: 9572600.0
12/02/16 - 4:00 PM ET

Financial Analysis


ACTIVISION BLIZZARD INC's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company has grown sales and net income significantly, outpacing the average growth rates of competitors within its industry. ACTIVISION BLIZZARD INC has average liquidity. Currently, the Quick Ratio is 1.22 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 10.37% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)1568.0990.0
EBITDA ($mil)589.0301.0
EBIT ($mil)299.0196.0
Net Income ($mil)199.0127.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)4053.04519.0
Total Assets ($mil)18380.014302.0
Total Debt ($mil)6362.04078.0
Equity ($mil)8818.07989.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin84.7676.57
EBITDA Margin37.5630.4
Operating Margin19.0719.8
Sales Turnover0.320.34
Return on Assets4.747.64
Return on Equity9.8813.69
Debt Q3 FY16 Q3 FY15
Current Ratio1.443.92
Debt/Capital0.420.34
Interest Expense44.049.0
Interest Coverage6.84.0


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)743.12730.94
Div / share0.00.0
EPS0.260.17
Book value / share11.8710.93
Institutional Own % n/a n/a
Avg Daily Volume8684330.09582621.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 50.33 for the Software industry and a premium compared to the S&P 500 average of 25.16. Conducting a second comparison, its price-to-book ratio of 3.37 indicates a premium versus the S&P 500 average of 2.79 and a significant discount versus the industry average of 7.91. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. 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 34.73 Peers 50.33   ATVI 12.70 Peers 21.89

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.

 

Discount. 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 significant discount 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 18.41 Peers 29.47   ATVI 0.53 Peers 0.79

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 significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ATVI 3.37 Peers 7.91   ATVI -22.30 Peers 25.88

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.

 

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

However, ATVI is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ATVI 4.99 Peers 5.76   ATVI 21.66 Peers 4.98

Discount. 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 discount to its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

ATVI has a sales growth rate that significantly exceeds its peers.

 

 

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