Activision Blizzard, Inc (ATVI) Gains But Lags Market: What You Should Know

Activision Blizzard, Inc (ATVI) closed at $74.36 in the latest trading session, marking a +0.03% move from the prior day. This change lagged the S&P 500's 2.59% gain on the day. Elsewhere, the Dow gained 2.66%, while the tech-heavy Nasdaq added 0.11%.

Prior to today's trading, shares of the company had lost 4.11% over the past month. This has was narrower than the Consumer Discretionary sector's loss of 13.09% and the S&P 500's loss of 9.22% in that time.

Wall Street will be looking for positivity from Activision Blizzard, Inc as it approaches its next earnings report date. In that report, analysts expect Activision Blizzard, Inc to post earnings of $0.43 per share. This would mark a year-over-year decline of 40.28%. Our most recent consensus estimate is calling for quarterly revenue of $1.71 billion, down 9.06% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.84 per share and revenue of $8.03 billion, which would represent changes of -23.66% and -3.89%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Activision Blizzard, Inc. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.07% higher within the past month. Activision Blizzard, Inc is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, Activision Blizzard, Inc is holding a Forward P/E ratio of 26.17. Its industry sports an average Forward P/E of 14.86, so we one might conclude that Activision Blizzard, Inc is trading at a premium comparatively.

Investors should also note that ATVI has a PEG ratio of 2.75 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Toys - Games - Hobbies was holding an average PEG ratio of 1.78 at yesterday's closing price.

The Toys - Games - Hobbies industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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