Benzinga - by Benzinga Insights, Benzinga Staff Writer.
In the dynamic and fiercely competitive business environment, conducting a thorough analysis of companies is crucial for investors and industry enthusiasts. In this article, we will perform an extensive industry comparison, evaluating Activision Blizzard (NASDAQ:ATVI) in relation to its major competitors in the Entertainment industry. By closely examining crucial financial metrics, market position, and growth prospects, we aim to offer valuable insights for investors and shed light on company's performance within the industry.
Activision Blizzard Background Activision Blizzard was formed in 2008 by the merger of Activision, one of the largest console video game publishers, and Blizzard, one of largest PC video game publishers. The combined firm remains one of the world's largest video game publishers. Activision's impressive franchise portfolio includes World of Warcraft, which boasts more than $8 billion of lifetime sales, and Call of Duty, which has sold over 175 million copies across 14 titles over 12 years.
CompanyP/EP/BP/SROEEBITDA (in billions)Gross Profit (in billions)Revenue Growth| Activision Blizzard Inc | 34.26 | 3.54 | 8.51 | 2.87% | $0.88 | $1.55 | 34.25% |
| NetEase Inc | 18.36 | 4.07 | 4.77 | 7.4% | $6.72 | $14.38 | 3.68% |
| Electronic Arts Inc | 36.78 | 4.40 | 4.34 | 5.5% | $0.63 | $1.56 | 8.89% |
| Sea Ltd | 95.82 | 3.77 | 1.96 | 5.1% | $0.4 | $1.45 | 5.2% |
| SciPlay Corp | 22.99 | 4.16 | 0.73 | 4.85% | $0.05 | $0.13 | 18.61% |
| DouYu International Holdings Ltd | 34.92 | 0.33 | 0.35 | 0.1% | $-0.01 | $0.19 | -24.06% |
| iHuman Inc | 6.73 | 1.28 | 1.14 | 4.98% | $0.04 | $0.17 | 4.5% |
| Average | 35.93 | 3.0 | 2.22 | 4.66% | $1.3 | $2.98 | 2.8% |
- At 34.26, the stock's Price to Earnings ratio is 0.95x less than the industry average, suggesting favorable growth potential.
- With a Price to Book ratio of 3.54, which is 1.18x the industry average, Activision Blizzard might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
- The stock's relatively high Price to Sales ratio of 8.51, surpassing the industry average by 3.83x, may indicate an aspect of overvaluation in terms of sales performance.
- With a Return on Equity (ROE) of 2.87% that is 1.79% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
- The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $880 Million is 0.68x below the industry average, suggesting potential lower profitability or financial challenges.
- The gross profit of $1.55 Billion is 0.52x below that of its industry, suggesting potential lower revenue after accounting for production costs.
- The company is experiencing remarkable revenue growth, with a rate of 34.25%, outperforming the industry average of 2.8%.
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Activision Blizzard against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
- When compared to its top 4 peers, Activision Blizzard has a moderate debt-to-equity ratio of 0.17.
- This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
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