Activision Blizzard, Inc (ATVI) Dips More Than Broader Markets: What You Should Know

In the latest trading session, Activision Blizzard, Inc (ATVI) closed at $75.70, marking a -0.46% move from the previous day. This change lagged the S&P 500's 0.13% loss on the day. Meanwhile, the Dow lost 0.15%, and the Nasdaq, a tech-heavy index, added 0.14%.

Heading into today, shares of the company had lost 1.27% over the past month, outpacing the Consumer Discretionary sector's loss of 6.89% and the S&P 500's loss of 3.32% in that time.

Investors will be hoping for strength from Activision Blizzard, Inc as it approaches its next earnings release. On that day, Activision Blizzard, Inc is projected to report earnings of $0.45 per share, which would represent a year-over-year decline of 50.55%. Meanwhile, our latest consensus estimate is calling for revenue of $1.52 billion, down 20.76% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.82 per share and revenue of $7.77 billion, which would represent changes of -24.19% and -7.05%, respectively, from the prior year.

Any recent changes to analyst estimates for Activision Blizzard, Inc should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 5.43% lower. Activision Blizzard, Inc is holding a Zacks Rank of #5 (Strong Sell) right now.

Investors should also note Activision Blizzard, Inc's current valuation metrics, including its Forward P/E ratio of 26.95. Its industry sports an average Forward P/E of 15.79, 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 1.86 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Toys - Games - Hobbies was holding an average PEG ratio of 1.61 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 85, which puts it in the top 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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