As the gaming sector continues to evolve to incorporate different content providers and devices, some companies are being left behind. Activision Blizzard (ATVI) is among the former, and if its second quarter earnings report is as positive as most analysts expect, the company will continue to be a leader in the field for some time to come.
The company currently receives four out of five stars from Motley Fool and an average rating of outperform. In fact, Motley Fool is so bullish on Activision that it declared it would lead the pack in “The Next Trillion-dollar Revolution.” Based on recent performance, such a statement is not radical. In the first quarter of this year the gross margin, operating margin, and net margin were up 100, 400, and 490 points, respectively.
Following a quarter in which games like Call of Duty and Skylanders: Giants, among others, showed positive sales, expectations for the second quarter earnings reports are high. According to average analyst estimates, the gaming industry leader’s revenues will grow nearly 19% and earnings per share will grow 20%. Twenty brokers have set an average price estimate of $15.54 with a low of $12.50.
Business Section: Investment Ideas
Activision Blizzard has favorably adjusted to its evolving industry, and the 73% of analysts who rate the stock as a buy is about fifteen percentage points higher than the average of its nearest competitors.
Below is a chart detailing how the firm has performed recently compared to the S&P 500 benchmark.
We have also compiled a list of Activision and its nearest competitors to help you start your research.
1. Activision Blizzard, Inc. (ATVI, Earnings, Analysts, Financials): Publishes online, personal computer (PC), console, handheld, and mobile games of interactive entertainment worldwide. Market cap at $13.37B, most recent closing price at $11.93.
2. Electronic Arts Inc. (EA, Earnings, Analysts, Financials): Develops, markets, publishes, and distributes game software and content for video game consoles, personal computers, mobile phones, tablets and electronic readers, hand held game players, and the Internet. Market cap at $3.5B, most recent closing price at $11.24.
3. Millennial Media Inc. (COOL, Earnings, Analysts, Financials): Provides interactive entertainment products primarily in the United States and Europe. Market cap at $73.21M, most recent closing price at $1.78.
4. Microsoft Corporation (MFST, Earnings, Analysts, Financials): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap at $247.57B, most recent closing price at $29.50.
Written by Dan Connelly
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