ATVI

Activision Blizzard Inc

TMT


Presented:11/18/2019
Price:$52.73
Cap:$40.51B
Current Price:$94.42
Cap:$72.42B

Presented

Date11/18/2019
Price$52.73
Market Cap$40.51B
Ent Value$34.71B
P/E Ratio24.93x
Book Value$15.93
Div Yield0.7%
Shares O/S768.26M
Ave Daily Vol7,755,806
Short Int3.39%

Current

Price$94.42
Market Cap$72.42B
Activision Blizzard, Inc. engages in the development and publication of interactive entertainment. It operates through the following segments: Activision, Blizzard, and King. The Activision segment develops and publishes interactive software products and entertainment content, particularly for the console platform. The Blizzard segment develops and publishes interactive software products and entertainment content, particularly for the PC platform. The King segment develops and publishes interactive entertainment content and services, particularly on mobile platforms, such as Google's Android and Apple's iOS. The company was founded in 1979 and is headquartered in Santa Monica, CA.

Publicly traded companies mentioned herein: Activision Blizzard Inc (ATVI), Amazon.com Inc (AMZN), Electronic Art Inc (EA), NetEase Inc (NTES), Take-Two Interactive Software Inc (TTWO), Tencent Holdings Inc (700 HK), Ubisoft Entertainment SA (UBI FP)

Highlights

The presenter is long shares of Activision Blizzard Inc (ATVI), which he views as a strong risk/reward opportunity at its current ~$53 per share price. Prior to this recently established position, he had never owned ATVI because he agreed with the commonly cited bear thesis that the company isn’t a strong earnings grower. Yet, he sees major upside to earnings through 2021, noting cyclical tailwinds, limited IP competition, and mobile growth as catalysts within this timeframe. As these factors play out, he estimates 2021 EPS of $3 – $3.50 and 2021 P/E multiple expansion to 20x – 25x in a reasonable bull case, implying upside to potentially $87.50 per share. He handicaps his downside as limited to ~$50, based on an EPS estimate of $2.50 and a P/E multiple of 20x. 

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Idea Discussion

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