Thursday, 21 Oct 2021

Activision Blizzard Stock Jumps After Q4 Results Exceed Wall Street’s Expectations

On Friday, Activision Blizzard shares reached their highest price since 1984, following quarterly results that exceeded Wall Street’s expectations. Shares closed up 9.6% at $101.61, the first time the company’s stock price has finished above $100 since January 20, 1984, when the stock closed at $103.12, according to FactSet data.

On Thursday, Activision Blizzard released its Q4 2020 results as well as plans to expand more franchises into mobile. In recent years, mobile gaming has been the fastest-growing platform for games, comprising nearly $180 billion in sales in 2020, according to IDC data.

“The success at Call of Duty in 2020 significantly outperformed expectations at the start of the year (even adjusting for the pandemic), and we expect Activision to apply similar business model innovation to other titles, using mobile to extend reach and free-to-play modes to drive player conversion to premium games,” JPMorgan analyst Alexia Quadrani told MarketWatch.

Raymond James analyst Andrew Marok thinks the company, which includes Activision Publishing, Blizzard Entertainment, King, Major League Gaming, and Activision Blizzard Studios, “has plenty of runway to reach new players through mobile and free-to-play offerings and capitalize on strong demand for planned new titles in existing franchises.”

Last year, Activision Blizzard detailed its long-term strategic growth plan, which would focus on new releases, live operations, adding PC and console games to mobile platforms, and creating “new engagement models” such as expanding into city-based player leagues and esports.

During Q2 2020, the company’s net revenues from digital channels topped $1.44 billion as a result of the increasing demand for online games due to COVID-19 lockdowns. By January 2021, the company’s net value was estimated to be $72 billion based on its stock trading price, which rose due to the ongoing demand for games during the COVID-19 pandemic.

On Tuesday, shares of Electronic Arts Inc. EA fell from a record closing high after the publisher reported quarterly results that didn’t meet Wall Street’s expectations. Take-Two Interactive Software Inc. TTWO is expected to report its results after markets close on Monday.

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