Activision Blizzard (NASDA:ATVI) is a well-known video game holding company based in California. You may know them from their infamous franchises of Call of Duty and Overwatch. Like Netflix and Roku, Activision has seen a huge surge in sales as more people are forced in doors. The stock itself has remained somewhat strong as investors prepare for improved revenue and user time at multiples we have not witnessed before. Tomorrows Earnings report will give investors a better indication on just how much the company is benefiting from people staying indoors. A pandemic proof stock, in this case Activision – is able to remain at high capacity in a dynamic and uncertain environment. This is something investors haven’t really considered till now.
Activision and it’s connection to consumers
Activision is more than just a company that sells video games. Most of remember jamming to the hits of guitar hero, performing dope aerial flips on Tony Hawks, or even playing with your mates on Call of Duty. Activision evokes a tidal of wave nostalgia in all of us. It is this deep emotional connection that is fuelling growth in Activision. Thus, it should come as no surprise that during a pandemic, people flock to Activision for entertainment.
Activision will always be known as a veteran of the gaming world. A company that survived the crashes within the industry and moved forward to redefine their vision for the new generation of gamers.
Is Activision worth the investment?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
Activision expects revenues of $1.32 billion for the Q1 of 2020. This equates to an estimated $0.38 EPS – a feat many companies this Q1 have been able to make. Now if the financial management is strategically set up, Activision will out-perform and under-estimate Q1 earnings. If Activision has done this effectively, it should send the stock North. If the earnings report blows investors out of the water, there is no reason Activision could not reach $75-$80. After the release of Call of Duty : Warzone – gamers have flocked to play giving it the title of one of the most popular games right now.
Not only will the report earnings drive investor confidence, the longevity of the company looks solid. While competition remains a key threat, Activision with strong management have been able to keep the company alive through the GFC and 2000 web bubble. On top of this, Activision has proven itself as a worthy company that can adapt to different climates – even the worst. I will keep our readers updated on Activision’s results and where we go to from here.
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.