Bull of the Day: Activision Blizzard (ATVI) - Bull of the Day
September 10 2013 - 4:43AM
Zacks
Video games have become a huge industry as both console gaming and
mobile apps remain quite popular with consumers. In fact, the video
game industry was recently valued at $67 billion, while growth is
expected to put the total valuation at $87 billion in 2017.
Given these figures, it is pretty clear that the trend is quite
solid in the video game space and that an allocation to this
growing market may not be a bad idea. One targeted way to do this
is with one of the top makers of games currently on the market,
Activision Blizzard (ATVI).
Activision Blizzard in Focus
ATVI is a company that has a big reach in the video game industry
as it is the producer of some of the segment’s most famous
products. This includes the
Call of Duty,
Guitar
Hero, and
Warcraft franchises, in addition to a
number of mobile games with operations across the globe.
The company has become a pretty big name thanks to many of these
titles, pushing this California-based company to a $19 billion
market capitalization. And with some new launches expected—a fresh
Call of Duty game is due out soon while new consoles are coming
online too—a further push up the charts is not out of the
question.
ATVI Fundamentals
This is especially true when investors consider the analyst outlook
for the company. Estimates have been jumping higher as of late, as
both the current year and next year periods haven’t seen a single
revision lower.
Meanwhile, the magnitude of these revisions has been absolutely
incredible, particularly when focusing on the next quarter and next
year time frames. For these two in particular, the consensus has
risen from 57 cents a share to 77 cents a share in the past two
months, while the next year figure has jumped from 90 cents to
$1.18/share over the same period.
With this kind of increase, some investors might be concerned that
ATVI might have difficulty in living up to the hype, but the recent
earnings history suggests otherwise. The company has thoroughly
crushed estimates lately, beating out the estimate by close to 50%
over the past four quarters.
Clearly, the company is firing on all cylinders and is well
positioned to take advantage of the positive trends in the video
game industry. Analysts seem to agree, and that is why we have
given ATVI a Zacks Rank #1 (Strong Buy).
Bottom Line
This strong buy rating means that we are looking for ATVI to
continue its run and outperform other stocks in the near term.
Plus, with its outperform Zacks Recommendation, the longer term
future is looking bright for this company as well.
So if you are looking to get in on the quickly growing video game
industry but don’t know where to begin, consider starting with an
allocation in ATVI. Activision Blizzard has several of the
industry’s most popular franchises, and with new titles and gaming
systems on the way, growth could definitely be ahead for this
industry titan for years to come.
Want the latest recommendations from Zacks Investment Research?
Today, you can download
7 Best Stocks for the Next 30
Days. Click to get this free report >>
ACTIVISION BLZD (ATVI): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Activision Blizzard (NASDAQ:ATVI)
Historical Stock Chart
From Jul 2023 to Jul 2024