Activision Blizzard Inc

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ATVI : NASDAQ : Technology
$58.28 -0.94 | -1.59%
Today's Range: 58.01 - 59.2
Avg. Daily Volume: 6239200.0
05/26/17 - 4:00 PM ET

Financial Analysis


ACTIVISION BLIZZARD INC's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. ACTIVISION BLIZZARD INC has strong liquidity. Currently, the Quick Ratio is 1.60 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has increased by 13.03% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY17 Q1 FY16
Net Sales ($mil)1726.01455.0
EBITDA ($mil)825.0734.0
EBIT ($mil)508.0495.0
Net Income ($mil)426.0363.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)3248.02888.0
Total Assets ($mil)16921.017302.0
Total Debt ($mil)4393.05841.0
Equity ($mil)9436.08348.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin84.4782.68
EBITDA Margin47.7950.44
Operating Margin29.4334.02
Sales Turnover0.410.28
Return on Assets6.084.97
Return on Equity10.910.31
Debt Q1 FY17 Q1 FY16
Current Ratio1.951.73
Debt/Capital0.320.41
Interest Expense42.057.0
Interest Coverage12.18.68


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)753.55738.01
Div / share0.30.26
EPS0.560.48
Book value / share12.5211.31
Institutional Own % n/a n/a
Avg Daily Volume6200290.08500777.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 71.17 for the Software industry and a significant premium compared to the S&P 500 average of 25.54. To use another comparison, its price-to-book ratio of 4.73 indicates a significant premium versus the S&P 500 average of 3.06 and a significant discount versus the industry average of 9.10. The current price-to-sales ratio is well above the S&P 500 average, but 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 43.87 Peers 71.17   ATVI 19.63 Peers 29.60

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 24.68 Peers 45.19   ATVI 0.78 Peers 0.82

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.

 

Average. 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 valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ATVI 4.73 Peers 9.10   ATVI 17.39 Peers 87.52

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 6.49 Peers 6.79   ATVI 42.09 Peers 8.48

Average. 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 valuation on par with 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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