Activision Blizzard, Inc. ATVI reached a new 52-week high of $38.76 in yesterday’s trading session, closing a bit lower at $38.57. While the company has had a bull run for quite a while now, the recent high is primarily attributable to the holiday season binge.
According to IBM’s IBM trend-watching app, Watson, Activision games like Skylanders and Call of Duty remained popular on Cyber Monday with demand for videogames shooting up.
The holiday season has traditionally been the most important time for video game companies, which generally save their premier launches to capitalize on the seasonal demand.
The company had unveiled the Call of Duty: Black Ops 3 in early November that is just before the holiday season. The game was welcomed warmly and garnered revenues of $550 million in its opening weekend itself. It became the biggest entertainment debut across movies, books, and music albums launched in 2015. The strong demand is expected to make this title the sixth one in the franchise to cross the billion-dollar mark.
In addition, the company’s other titles like Destiny and the World of Warcraft have continued to remain strong.
Overall, the second half of this year, has been phenomenal for Activision with its addition to the S&P 500 Index Following this, the company announced its decision to acquire Candy Crush maker King Digital Entertainment plc KING for $5.9 billion. The acquisition is especially important for Activision as it will expand its presence in the lucrative mobile gaming business (which otherwise had been a sore point for Activision).
In the last six months, Activision has performed well above the S&P 500, having returned over 50% in contrast to a decline of 0.3% for the index. In the past 30 days, upward estimate revisions have also pushed up the Zacks Consensus Estimate for 2015 by 2.4% to $1.27 per share.
We believe that Activision’s strong portfolio (with frequent updates) will not only continue to boost its engagement levels but will also provide it an edge over peers like Electronic Arts EA, Take-Two Interactive Software Inc. and Glu Mobile, Inc.
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