Activision Blizzard (ATVI) Stock Gains Ahead of Earnings Release

NEW YORK (TheStreet) -- Activision Blizzard (ATVI) shares are up 0.75% to $22.92 in trading on Wednesday ahead of the release of the video game maker's first quarter earnings results after the closing bell today.

Analysts on average are expecting the company to report earnings of 7 cents per share, a 12 cent decline from the 19 cents per share the company reported earning in the year ago period. The company is also expected to generate revenue of $655.8 million. a 16.1% decline from the $772 million the company generated a year ago.

The maker of the popular 'Starcraft' and 'Warcraft' computer games has topped analysts' financial expectations for the past eight consecutive quarters. 

Fellow video game maker Electronic Arts (EA) reported its quarterly results yesterday, topping analysts 33 cent per share earnings expectations with an EPS of 39 cents per share.

TheStreet Ratings team rates ACTIVISION BLIZZARD INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate ACTIVISION BLIZZARD INC (ATVI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • ATVI's revenue growth has slightly outpaced the industry average of 0.6%. Since the same quarter one year prior, revenues slightly increased by 3.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 $1.14 versus $0.95 in the prior year. This year, the market expects an improvement in earnings ($1.18 versus $1.14).
  • 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 108.7% when compared to the same quarter one year prior, rising from $173.00 million to $361.00 million.
  • You can view the full analysis from the report here: ATVI Ratings Report
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