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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Activision Blizzard, Inc. (XNAS:ATVI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
ATVI
Name:
ACTIVISION BLIZZARD, INC. (XNAS:ATVI)
Sector:
627.00M
Industry:
Electronic Gaming & Multimedia
CEO:
Mr. Robert Kotick
Total Employees:
9,800
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 311.21% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ACTIVISION BLIZZARD, INC.(ATVI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ELECTRONIC GAMING & MULTIMEDIA INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
77.53
One Month Price Target:
$77.75
Six Month Price Target :
$78.87
Likely Price in One Year's Time:
Ticker:
$80.2
Likely Trading Range Today Under (Normal Volatility)
$77.29
Price Upper limit ($) :
$77.87
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$74.09
This week:
$69.83
This month :
$62.13
Other Primary facts
Market Cap:
60.11B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
782.31M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
25.88%
-14.06%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$93.50
$86.12
$61.56
$68.94
Medium risk (<10%) entry points
Buy Call
Sell Call
$83.71
Buy Put:
Sell Put:
$82.14
$71.33
$72.92
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
ATVI
Sharpe Ratio:
2.77%
Comparison:
ATVI, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 10.38% higher than the industry
& ratio is 21.43% higher than the market/S&P 500 average
Average Returns/Yield of
ATVI
Daily returns:
0.07%
Weekly returns:
0.35%
Monthly returns:
1.39%
Yearly returns:
21.16%
Comparison of returns:
Average annual returns/yield (last 3 years) is -21.01% below industry average
Classification:
ATVI, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.76
Statistical test of Returns:
ATVI has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.20%
Weekly Volatility:
4.91%
Monthly Volatility:
9.82%
Yearly Volatility:
34.02%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.62%
Volatility in last five trading days has been -71.88% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.44%
Weekly VaR:
-9.93%
Monthly VaR:
-19.86%
How Much Can the price of
ATVI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-68.79%
This translates to price declining to:
$64.54
This translates to price declining to:
$24.20
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
ATVI is a 40.15% riskier investment compared to the market/S&P 500 & is 20.07% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -22.56% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
ATVI
Beta in relation to market/S&P 500--0.51
Expected beta in 1 year's time:
0.609
Expected beta in 3 year's time:
0.862
Unlevered (debt free) Beta:
0.437
Beta in relation to Nasdaq (XNAS):
0.533
Beta in relation to all global stocks::
0.396
Beta Comparison & Analysis
Beta of competitors/peers::
0.751
Beta is -31.69% lower than peers
Average Industry Beta:
0.604
Beta is -15.05% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
14.10%
Sustainable growth rate is 5.00% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.100
Alpha is -27.56% below industry average alpha yield
Alpha is 640% higher than market/& is unsustainably high
Analysis of Cost of Capital of
ATVI
Equity cost of capital:
0.067
Equity cost of capital is -8.54% below industry mean WACC
Unlevered (without debt) cost of capital:
5.67%
Before-tax cost of debt:
3.49%
After-tax cost of debt:
2.76%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.76%
WACC is 6.97% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$10.61
Revenue growth rate per share of (3Y):
3.4
Annual revenue growth rate is -69.51% below industry average
EPS:
$3.16
Expected Annual growth rate of EPS (3Y):
20.62%
Expected future EPS growth rate is -8.45% lower than the Electronic Gaming & Multimedia industry
Free cash flow (FCF) per share:
$2.72
Balance sheet equity growth per share: 39.28%
Equity growth rate per share is 800.00% higher than the industry
Debt per share
$4.61
EBITDA per share
$4.33
Valuation Analysis Today of
ATVI
P/E Ratio:
32.39
P/E Ratio of Competitors/Peers:
46.32
P/E ratio is -30.07% lower than main peers & is -2.49% lower than the industry
Stock price/value with industry average P/E ratio: $104.98
ATVI is -26.15% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
7.31
Price to sales ratio is 83.85% above the industry mean
P/B (Price to book value ratio):
3.4
Price to free cash flow: 28.53
Price to free cash flow ratio is 11.88% higher than the industry
Net income growth rate (3Y):
47.13%
Net income growth rate is -215.69% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 1.74%
Previous Dividend: $0.47
Previous adjusted dividend: $0.47
Previous Dividend: $1.35
Expected next dividend best case: $0.61
Expected next dividend worst case: $0.33
Average dividend payment (long-term): $0.45
Average dividend increase/decrease (growth rate) % per period: 7.32%
Expected next dividend payment date: 08/04/2022
Expected next dividend record date: 14/07/2022
Expected next dividend declaration date: 05/04/2022
Previous dividend payment date: 05/06/2022
Previous dividend record date: 15/04/2022
Previous dividend declaration date: 02/03/2022
Dividend History:
2022-04-13--$0.47
2020-04-14--$0.41
--$0.00
2021-04-14--$0.47
--$0.00
--$0.00
Dividend growth rate is -54.07% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
20.23%
Net debt to equity ratio:
-41.27%
Debt to assets ratio:
14.43%
Net debt to assets ratio:
-29.42%
Debt-to-asset ratio is -65.61% below industry average
Ability to repay debt:
Interest coverage ratio:
26.9
Interest coverage ratio is -75.45% less than industry average
Looking forward:
Debt growth rate:
0.08%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.388
Statistical significance of correlation:
ATVI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.384
Stock price is 1.18% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.384
Correlation of price movement with Nasdaq (^IXIC):
-0.036
Covariance of price movement with the market:
-0.045
Kurtosis
31.893
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
2.059
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
ATVI
Gross Profit Margin Ratio:
293%
Operating Profit Margin Ratio:
35.47%
Operating profit margin is -580.31% lower than the industry
Net Profit Margin Ratio:
293%
Effective Tax Rate:
13.59%
Effective tax rate is 3.85% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.87%
Return on equity (ROE) is 6010.54% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.89%
Return on assets (ROA) is -303.22% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
5.45
Current ratio is 29.91% above industry average
Cash Conversion Cycle (days):
-13.5
Cash conversion cycle is -117.83% below industry average
The remaining useful life of property plant & equipment is: 20.0 years
Stock based compensation to net income ratio:
3.96%
In-depth Efficiency Analysis
Revenue generated per employee:
846.6K
Each employee generates 25% more revenue than industry average revenue per employee
EBITDA generated per employee:
345.8K
Each employee generates 168% more EBITDA than industry average revenue per employee
Profit generated per employee:
252.4K
Each employee generates 284% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
64.0K
Each employee generates 793% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.3M
Each employee generates 793% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 16.26%
Growth rate in R&D investment/expenditure is 272.56% higher than the industry
Competitors/Peer firms of
ATVI
ZOOM VIDEO COMMUNICATIONS, INC. (XNAS:ZM)
Baidu, Inc. (XNAS:BIDU)
VODAFONE GROUP PUBLIC LIMITED COMPANY (XNAS:VOD)
MATCH GROUP, INC. (XNAS:MTCH)
NETEASE, INC. (XNAS:NTES)
LIBERTY BROADBAND CORPORATION (XNAS:LBRDK)
LIBERTY BROADBAND CORPORATION (XNAS:LBRDA)
SIRIUS XM HOLDINGS INC. (XNAS:SIRI)
ROKU, INC. (XNAS:ROKU)
Current Analyst Ratings
Strong buy�38%
Buy�46%
Hold�29%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
8.30B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
2.22B
6.08B
1.33B
720.00M
1.76B
1.04B
-
3.09B
3.00M
126.00M
400.00M
3.39B
2.94B
2.47B
2.86B
389.00M
2.47B
Statement of Cash Flow
Date:
Period:
99.00M
Differed Income Tax :
- 64000.00K
Stock Based Compensation :
98.00M
Change in Working Capital :
118.00M
Accounts Receivables:
440.00M
Other Working Capital:
- 278000.00K
Other Non-Cash Items:
- 4000.00K
Net Cash Provided by Operating Activities:
642.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
10.97B
-
10.97B
530.00M
-
989.00M
12.49B
174.00M
9.80B
734.00M
-
1.31B
511.00M
12.53B
-
25.01B
207.00M
-
-
835.00M
1.25B
2.29B
3.61B
907.00M
4.89B
-
7.18B
-
12.05B
- 586000.0K
-
March 31, 2022 at 6:00:00 AM
5.31B
17.83B
25.01B
-
3.61B
- 7359000.0K
22.00M
- 15000.00K
7.00M
-
16.00M
-
-
- 113000.00K
- 97000.00K
- 10000.00K
542.00M
10.98B
10.44B
642.00M
- 15000.00K
627.00M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
ATVI
2023
2024
2025
2026
2027
$80.60
$83.38
$86.25
$89.23
$92.30